Financial freedom means something different to all of us. There is no one way to get there either. Some of us might invest in property; some may invest in shares or businesses and others may travel a more entrepreneurial path altogether.
But no matter how we decide to invest and grow our wealth, a big part of the process of achieving financial freedom for us all is checking in with our mindset, attitudes, and behaviours around money.
Why is that necessary? I have a saying that Warren Buffet could create your personal investment plan and it wouldn’t make one bit of difference if you couldn’t stick to the plan.
If you can’t control your spending, comfortably live within your means, and avoid short term debt for example, then even the best laid plans will likely come unstuck.
So, what mindsets and daily money behaviours will keep your plans for financial freedom on track?
There are many, but here are 5 to help guide you.
- Finances must be actively managed
I’m not talking about your investments here necessarily. I’m meaning your day-to-day cashflow and money management. Today there are many automated tools available to help us save, invest, and pay bills, and these can be helpful to a degree.
~Novel Serialisation: Heavens Fire~
You need to be monitoring your accounts regularly to make sure everything is working as planned. Incomes, interest rates and the cost of living is changing – these things must be monitored to ensure you are staying in front each month and to see whether there is room in the budget to add a little more money to savings or investments each month.
- Learn to live comfortably within your means
This is a much better mindset to establish than focusing on living on a budget. Budgets have negative connotations whereas ‘means’ is a flexible term. It could mean $2,000 a month or $20,000 a month. The idea is that you develop a systemised approach to managing your income and expenses with the objective of always ensuring there are funds ‘left over’ to save, invest and grow your wealth.
If you can adopt this mindset, you will always feel as though you are living to a plan that is creating financial freedom for you and can maintain your wealth creation strategies long term.
- Learn to think long term
Financial wellbeing research continues to show us that people who have a long-term orientation around their finances typically report higher levels of financial wellbeing.
How you behave with your money today will have a huge impact on your life 5, 10, or even 30 years from now. What kind of life do you want to provide for your family? What kind of lifestyle or retirement do you want to live out? How soon do you want to be debt free?
Learning to regularly check in with your long-term goals and avoiding the trap of getting bogged down with surviving the next few years will help your financial decision making in the present.
- Anticipate your own behaviour
Part of a healthy financial mindset involves knowing understanding what your natural inclinations are to money management. Are you impulsive? Do you overspend? Or are you over-conservative or frugal when it comes to your finances? Creating an awareness about your behavioural strengths and weaknesses can limit the damage these tendencies can otherwise create and allow you to develop strategies and mindsets that deal with them in a way that supports your financial plans instead.
- Develop financial resilience
The journey to financial freedom is rarely ever straightforward unless you are lucky enough to win lotto perhaps! Setbacks are likely, and many of them are likely to be out of your control. It is important to develop financial resilience both from a mindset perspective and a resources perspective. Never overcommitting, taking on too much risk for your circumstances and having surplus cash for emergencies is a great way to create financial security over the near and long term.
What are some of the ways you can improve your mindset and behaviours today to support your journey to financial freedom?
By Rebecca Maher is the Managing Director of Proforce Wealth
Proforce Wealth
Proforce Wealth is a dedicated financial coaching and training firm, focused on improving employee financial wellness and reducing the negative impact that financial stress has on business.
Rebecca Maher is the Managing Director of Proforce Wealth. With over 10 years’ experience across financial services, along with being recognised in the 2019 (AFA) Financial Services Awards, Rebecca brings a wealth of knowledge and experience, coupled with a passion for coaching clients in reaching their financial goals.
More information about Proforce Wealth can be found at www.proforcewealth.com.au
