You have likely heard all the personal finance tips before: start early, have an emergency fund, avoid debt, invest in a 401k, don’t overspend on your house, avoid expensive cars, NO STARBUCKS! But this doesn’t do it for us. It doesn’t make us change for the long-term. It doesn’t change the underlying reasons we make the money decisions we do. Today we are going to get to the motivations that will cause you to take action.
Ask yourself these questions to help you consider the emotional side of money, so that you can begin doing what you KNOW you should do (even if you are young and haven’t yet made mistakes yet, learn about yourself so you can avoid them):
- Have you ever made a quick decision about an investment or large expense based on a gut feeling only later to find out your gut was wrong? Think about the strong desire you had for your decision to pay off (or bet to pay off). Why did you place the bet? What about the possible pay off would have changed your life for the better? Remember, investing with your gut is gambling NOT investing. Know what drives your decisions. If that drive or motivation is meaningful enough, you should take the time to educate yourself and be confident about something before you put money into it.
- Are you indecisive when it comes to money and afraid of making a mistake? Maybe you think you don’t have money to lose and if you make a mistake you will be much worse off. To you, any chance of losing money is too risky. What if you have a large cash cushion in the bank, would that make you more confident to make money decisions? If you knew exactly where all your money was going, could you be more decisive? Ask questions, get facts, and become knowledgeable about the items you need to know to make a good decision; learning will give you more confidence. I highly recommend listening to Jim Kwik’s podcast KWIK BRAIN Episode 42: Solve Problems And Make Better Decisions Quickly.
- Do you have frequent arguments with someone close to you about money? Maybe you want to see a change in a partner’s spending habits or they want to see a change in yours. You must be able to express to your important person why change is essential or why you may be resisting change. Usually, people know their actions may be wrong, but you have to get to the “why” behind the action to be able to move in a more positive direction. Find a dream together to initiate desired actions and motivation for both of your benefit.
- Did anyone ever really teach you about money when you were younger? Maybe you never learned how to be financially free; there was no mentor to show you the way. When no one has taught you the right way, you must act to educate yourself and solve any uncertainty. YOU CAN DO IT YOURSELF! You’ve come to the right place at kittoday.com.
- When you were a child, did you have adults in your life that made money mistakes? What do you think about those mistakes now? Are you repeating bad habits or are the mistakes of others pushing you in a better or worse direction?
- Does your income fall short? It is so very easy to say, “just make more money.” First, make a list of things you love to do in addition to your strengths and weaknesses. Find areas of work that are a match between them. Change DOES NOT happen overnight. You may need to get a side hustle before you can make a big career change, or find a more lucrative position. Take baby steps to satisfy the income need now. Sacrificing today is worth it. Look to a support system to cheer you on in the process.
- When was the last time you checked your credit score? Is it below 700? If it is below 700, then look at ways to improve your score today (here are some tips) and understand why you made the decisions you made to hurt your credit. Try to avoid blaming someone else for the shortfall but accept any bad choices you made and decide not to repeat them. Move forward, what’s done is done.
- Do you have a feel-good emotional reaction to spending? Maybe like a therapy of sorts? I have this trait, and I know which parent gave it to me (thanks, mom 😉)! I am a believer in rewarding myself when I achieve a goal. I also love to see people happy, and I often overspend for others. For those like me, we have to plan for our rewards and define them ahead of time. We also must find other ways to be a giver; maybe perform random acts of kindness that don’t require a lot of money (there are some good free ones listed here). Find a feel-good hobby or volunteer opportunity that fulfills the desire to make others happy.
- Maybe you have never really needed to worry about money until now, and you feel overwhelmed and not sure where to start? You have to get out of your way. If you are missing a financial education, then start getting one today. Commit to 5 minutes a day searching the web about personal finance, or visit us and subscribe to our newsletter.
Create a list of steps that you will need to do so you are ready to take action (see our post Man Up!). Feeling overwhelmed by money is very common, but breaking down the worry into small parts makes the mountain appear smaller.
- Have you set a good example for others (maybe your kids, maybe nieces or nephews)? Someone is always watching you; maybe it’s a child or maybe it’s other adults. As adults, we get a lot of investing tips or personal finance ideas by watching others. Why not be an example yourself and show others a positive financial path. What a great motivator!
The purpose of this post is for you to get to the “whys” of your actions and what underlying reasons exist that created your current financial state. Good or bad you NEED to know what drives you to create financial freedom and peace. Look at our infographic so you can begin creating good goals. Be realistic. Many psychologists say that it can take up to 6 months to make meaningful life changes. Don’t expect to change overnight (give yourself a break). You will be tested again and again with new financial choices in the future, and you have to slow down and think about where you have been and what motivates you to move in a positive direction.
Procrastinators, listen to Jim Kwik’s podcast Episode #10: How to Stop Procrastinating, and take action. Unfortunately, there is no shortcut to financial freedom. Let me repeat, “there will be NO SHORTCUT!” Get started now!
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