We have all heard people say “ I am no good with money” or “ money and I will never be friends”, yet other people seem to simply attract money and have it all together. Why is that?
What is your relationship with money like? And how does this relationship affect your life?
For some people, and particularly women, we are prepared to accept this is our destiny in life, to accept that money and financial freedom is beyond us.
It doesn’t need to be this way.
We seem to have this notion that we should just ‘know’ how to control our money and finances instinctively, by some sort of osmosis, yet we fully accept that we need to be taught other skills in life like driving a car or learning how to cook. So why is learning about ‘money’ such a blind spot for many people?
As someone who works with money and financial management every day, I want to assure you that learning how to control your money and gain financial freedom IS a skill that can be learned and certainly one that can be mastered if you know where to start.
What’s The First Step?
~Novel Serialisation: Heavens Fire~
The first step to learning how to control your money and not have money control you, is to find out what your money mindset is.
Money mindset has in recent times been more associated with the manifestation and spirituality of money, but it is much simpler than that. In a nutshell, your money mindset is your thoughts, beliefs and feelings around how you spend, save and invest your money.
People that have a good money mindset will generally have good control over their money, so it is important that the first thing you do when starting down the path of financial control is to dig deep on what your own personal money mindset is.
There are two types of people when it comes to money mindset. The abundancy mindset type and the scarcity mindset type.
Scarcity Mindset
These are the people that will
- tell themselves that they will never have money
- constantly compare themselves to others
- generally, will have significant debts or have money stress
- tell themselves that if they just had more money everything would be right
- believe that money is for the greedy or wealthy
- that money is the root of all evil
These people do not have a healthy relationship with money. Money will be controlling them rather than the other way around. These are what I call the glass half empty people.
Abundance Mindset
These people are the type that believe that
- money is there for them to control
- money will allow them to have what they want in life
- money is what makes the world a better place
- they don’t need to compare what they have to others
- they will have their loans under control
- they will be comfortable with their financial future
- they can say no to spending money
These people have a healthy relationship with and are at ease with their money. They are the glass half full people.
It is important to understand that money mind set has nothing to do with how much money you have. There are plenty of people that are very wealthy but cannot control their money and live within their means. Conversely there are people on very low incomes that have everything they want and have their financial future mapped out because they have a healthy money mindset and control their money very well.
Where does your money mindset come from?
Like most things in life your money mindset is formed when you were very young. These thoughts and beliefs around your relationship with money has been influenced by family and your family’s circle of friends and your environment. But also, your own personal psychology around money. This is why two siblings who have been raised in the same physical and emotional circumstances can have completely different money mindsets.
How money was handled when you were growing up will have a huge influence on how you view money. Was money a source of arguments or was money talked about favourably? Did there never seem to be enough money when it was needed or was money set aside and accounted for? These will all have a bearing on your view of money.
Can you change your money mindset?
Absolutely you can! Your money mindset is not set in stone. There is no magic wand. It is up to you to want to change and commit to that new you.
We have all said to children, you can do whatever you want to do or be whatever you want to be, as long as you put your mind to it, but as adults we forget this and let negative thoughts get in the way of taking control over our financial future, limiting our ability to take control of our finances and change our financial path.
It is important that you be prepared to make changes to what you have done in the past, change your attitude to money, be prepared to learn to control money and allow yourself to make mistakes along the way. Don’t allow setbacks to be the reason to not continue to grow.
What do you need to do to change your money mindset?
The first thing of course is to determine what your money mindset is, then consider why it is important that you change your mindset, what your life will be like when you have control over your money, how your family will be impacted by the new you.
This is an important step and one that is often forgotten.
When times get tough, and you feel yourself losing control over your money think back to your “why” as it will keep you motivated which will in turn see you achieving all that you want to achieve.
It is important to think about things that you have done before that you don’t want to do again – mistakes that you have made with money. But equally think about the things that you have been proud of, achievement that you have had with money that you would like to do more often.
When you think about these you will be changing your mindset because you will be thinking positively about money and what it can provide for you.
Tell Your Money Where To Go!
Telling your money where to go is one of the most important things you can do to take control of your money. What I mean by this is setting a budget (yep that B word actually IS vital) that allows you to take back control of your spending.
When you learn to live within what you can afford, put money aside for bills, save and invest in your future, you will have a sense of calm and control like you have never felt before. A budget lets you set a strategy in place to pay down your debts as quickly as possible, set money aside for the future and shows you how to live within your means.
A budget is not about restricting what you can do and what you can spend money on. It’s more about giving you the ability to determine what is important when it comes to spending money.
A budget gives you a framework to have a healthy relationship with money.
What is an OMG account and why do I need one?
We have all heard the saying about setting money aside for a rainy day. Well, that is what I call an ‘OMG account’. Because that is usually the first words to come out of your mouth when that unexpected bill arrives, or the car breaks down. “Oh My God how am I going to pay for that!”
An OMG account (sometimes called an emergency fund or plan B account) is the account where you save for the unexpected that in life will always happen.
An OMG account is the account that will ensure you don’t end up using your credit card or worse, one of the Buy Now Pay Later schemes to get yourself out of a sticky situation that will ultimately add to your financial stress.
I say unexpected to mean that it wasn’t planned because at some point in time we can all agree those unexpected bills are expected to come.
An OMG account is also the account that not only covers for those unexpected bills but also lets you leave a job you can’t tolerate anymore or leave a toxic relationship. This is especially important for women!
How much you should set aside in your OMG account will vary from person to person, but a great start is three months of living costs…..and I mean ALL of your living costs (so this is where having a budget and KNOWING these figures is important).
If you don’t have an OMG account, this is the first priority for you to start working on as quickly as possible. To kick start your OMG account, I usually suggest having a good look around your home to see if there are things that you no longer use or need that you could sell. Also using your budget to set aside money each pay day to build this fund up as quickly as possible.
Before long you will feel much more in control of your money.
OK – Got Budget Sorted, Have OMG Account – What’s Next?
So, by now you have looked at your money mindset, put a budget in place and created your OMG account to cover for those expected expenses that are part of life.
What’s other tools can help keep your money life on-track?
Whilst many people are quick to complain about their banks, the reality is a good banking system will be the savour to keep you in control of your money without having to think about it.
I suggest that most women set up six bank accounts so that never again will you have to think about how much you spend or whether you can pay your bills when they arrive. It really is the answer to having control over your money so that your money can work hard for you.
So, what are the six bank accounts that I believe every woman needs?
#1 – Bank account one is where you save for all those regular bills, the account that you set aside money each pay so that you never have to wonder again how you are going to pay that bill.
#2 – Bank account two. This is the account that you set aside for your week-to-week spending. Things like your groceries or the petrol for your car, your lunches or coffee habit.
#3 – Bank account three is where you save for the luxuries in life. The things that bring you happiness and joy. You many even like to call it your ‘Happiness Account’ in your online banking. You’ll be amazed at how much you love putting money in there when it has that name.
#4 – Bank account four is your OMG account that we talked about earlier.
#5 & 6 – Bank account five and six are your short term and long term savings accounts. These are the accounts that will let you reach for your goals and set yourself up for a brighter happier future. Bring forward your retirement or let you work less, holiday more or whatever you want to achieve in life.
I know some of you will think that six bank account is going a little overboard but believe me when I tell you that setting these accounts up and using your budget to add to them each pay will be the difference between where you are now and where you want to be when it comes to financial freedom and financial control.
Are you ready to make changes to the way you deal with money now to give you the financial freedom we all desire in the future?
By Jennifer Richardson
Jennifer Richardson – Bio
Jennifer Richardson is the founder and sole director of financial services’ company 123 Financial Group.
She is an exceptional accountant, financial adviser and mortgage broker, with over 30 years’ experience in the financial services industry.
Jennifer is also a dynamic, down-to-earth person who is widely respected for her common sense and real-life approach to money, which clients often describe as a breath of fresh air.
Through her latest venture, Got Money Honey, Jen now hopes to share her extensive experience and down-to-earth wisdom with the women of Australia.
She is passionate about ensuring women have the tools and know-how to build financial security and freedom for the future: freedom from worry, freedom of choice, freedom to live their best lives.
https://www.gotmoneyhoney.com.au/
