Solving your money woes starts with overcoming your financial ignorance. How do you do that? Here are the steps:
First, you have to acknowledge to yourself that you are not a born financial expert. No one is. If you want to be financially savvy, you have to work at it. That means you have to be humble enough to admit that your knowledge about money at this point is zero. A lot of us take offense at being called ignorant because we consider that a blanket term for a lack of knowledge about everything. But as we have discussed above, being financially ignorant is only confined to your lack of knowledge in the area of finances, not in any other area in your life.
You can be the best teacher to preschool children, guiding them in the basics of phonics and reading and simple math every day but that does not always mean that you are a good money manager. You can be the best car mechanic in town but this does not always make you a genius at budgeting money. Again, you are not born with some special innate knowledge about how to handle money. You have to learn that. How do you do that? Read on.
You have to educate yourself about money. No, this does not mean going back to college and learning about the basics of money management here—most colleges don’t include this in their curriculum anyway. It means reading good books about the subject. It means doing online research to scour articles and other related resources that teach you how to manage your wealth. There are literally thousands of websites on the Internet that focus on this topic so you should be able to find one that gives good advice.
As far as finding advice is concerned, just be wary when scouring online sources. A lot of those are from big credit card companies who, of course, want to encourage clients to keep on living on credit. If you are already burdened with debt, the first thing you want to do is free yourself from it so anything that will encourage you to get more and more credit cards is simply not the solution you need.
Third, keep on learning about how to manage money. It is said that the only thing constant in life is change. Although the principles of saving rarely change, other considerations like how you plan your retirement, what your 401k options are, and other federal rules and regulations that affect your bank accounts and other finances could be altered. You have to keep abreast of these happenings so that you will not be left behind and can adjust the way you manage your wealth accordingly. Even your budget has to be reviewed regularly so that you can make the necessary adjustments when something comes up.
Battling the Desire to Keep Up Appearances
One of the really ignorant things you can do is to try to keep up appearances so that you can appear respectable, decent, and likable to your friends, family, and yes, even former high school classmates. Perhaps it’s part of the human psyche that we crave for respect and attention. Most of the time, however, we tend to overdo our desire to “keep up with the Joneses.” Most of the time, we end up broke and in debt even as we dress ourselves outwardly in the most fashionable clothes, the newest cars, and the regular parties we throw to our families and friends. People think we are living the American dream when in fact our financial life is a living nightmare.
If you really want to make a lot of headway with your finances and want to become the next millionaire, you should stop caring about what people think of you and start thinking about what your wallet and your bank account has to say. Are your finances already in the red? Is the electric company threatening to cut off your electricity? If the answer to both questions (and similar ones) are in the affirmative and you still think that you will die if you can’t have the new designer bag that just came out, then your way of thinking needs a major overhaul.
But as we all know, it’s extremely challenging to battle this desire that has been ingrained in our system for so long. After all, we all love our things and whether we admit it or not, we attach our self-worth to them. Thus, it’s understandable that we meet a lot of resistance from ourselves when we try to solve this problem. But winning is possible. Here are some steps to help you change your mindset:
First, you have to really want to change. The first step towards believing that you can become financially stable is to believe that you really want to be. This might seem quite easy at first but in reality, it takes a lot of introspection. If you look deep into your finances and are content with the way you manage your finances now then you won’t be convinced that you need to change. If, however, you see a pauper years from now when you retire and seriously want to avert that, you need to plant the seeds of change now.
Second, you have to stand up to peer pressure. This might seem very high school-ish, but we succumb to pressure from friends, family, and society when we try to live up to their expectations. We are living the way big clothing companies want us to live every time we feel we are left out if we don’t buy their latest creations. We are bowing down to peer pressure every time we feel we ought to bail out a younger (or older) sibling from debt because our family thinks we are well-off even if we are drowning in debt ourselves. You have to learn to say no—and say it even to those you love—if you are serious about straightening out your finances.
Finally, you have to let go of that most important thing you have but cannot afford. If you are up to your neck in financial troubles and the only way out is to sell the business you have worked so hard to put up then you have to do it. The same goes for that car you hold dear, the house, or that rare art collection. Whatever it is, you have to let it go. Only when you have done so will you start the road towards financial freedom.
Other related info you might be interested in:
No comments:
Post a Comment