Five years ago, my financial situation was very different from what it is right now. A series of bad choices in my 20s, combined with some of those nasty “curveballs” that life throws at you every so often, had resulted in a lot of debt and a very keen understanding that if I didn’t take some serious action to get myself out of the hole I was sitting in, things were going to go from really, really bad to much, much worse very quickly.
It was pretty obvious that everything I had been doing before in regards to money wasn’t the right way to do things and so I decided that there had to be a better way. I wasn’t prepared to run the risk that, five years down the road, things would be even worse and I knew that the only person who could get me out of the mess I was in, was me.
I had listened to enough episodes of the Dave Ramsay radio show to know that it’s totally possible to dig yourself out from under the debt mountain if you’re prepared to “live like no-one else” in order to get to your goal but for some reason, the knowing wasn’t enough to give me the push I needed to start doing; something was in my way.
Then, I read a book that gave me the “lightbulb moment” that kick-started me on the path I’ve been steadily navigating over the past few years. The book inspired me to step out of my comfort zone and take a free weekend course that (literally) changed my life. I’m always hesitant to say that because it sounds so dramatic and hokey but it’s true. What the book and the course did, that none of the other materials I’d been reading or listening to did, was it taught me how my own psychology was getting in the way of my best intentions to get out of debt. Not only that, they showed me what was possible if I was willing to give up my old habits and ways of thinking and try something new.
The book was T. Harv Eker’s, “Secrets of the Millionaire Mind”. Eker claims that after spending just a short amount of time with someone, he will be able to identify enough about their “money blueprint” to determine whether or not they will become financially successful. His theory centres on the idea that our ability to earn, hold and grow money is deeply influenced by everything we’ve ever heard, seen or experienced in relation to money. The perceptions about money that are passed on to us as children, combine with our own experiences and the attitudes of those around us and these make up the core of our money blueprint.
The good news is that even if your money blueprint isn’t currently helping your financial situation, it’s possible to change it. By digging below the surface of our opinions and behaviours, we can identify where our beliefs about money came from and whether they are helpful or hurtful to our own money journey. Once we’ve identified these limiting beliefs, then we can work on adjusting our thinking so that our beliefs are more in line with where we want to be financially.
For example, many people have a perception that money is difficult and complicated. Perhaps they watched their parents struggle financially growing up, perhaps they assumed that because they’re not good at math they’re also not going to be good with money or perhaps they grew up in a household where no-one ever talked about money and they’ve never been taught the basics of money management. Whatever the root of the belief, as human beings, we find it much easier to put time and energy into things we find interesting and rewarding and it’s not hard to see why we might not want to put much time and energy into something that we see as difficult and complicated.
The problem is that when we don’t want to do something, we tend to procrastinate. When you procrastinate on taking care of your money; when you don’t pay attention to it or make sure it’s working for you, the consequences tend to be negative. You find yourself getting into debt or getting caught with late fees and NSF penalties and money becomes a source of stress. These negative experiences reinforce your existing belief that money is difficult and complicated, you start to feel trapped and so it becomes harder to motivate yourself to take control of your money and the negative consequences continue.
Recognizing that your belief that money is difficult and complicated isn’t helping you break the cycle and get ahead financially is the first step to changing your money blueprint. The next step is to look for an alternative belief about money, a more positive belief, that will help you get ahead rather than encourage you to stay behind.
The reality is that money isn’t difficult and complicated and managing it well doesn’t have to be stressful or time consuming. At its heart, money management boils down to three simple principles: pay yourself first, know what you’re spending and live within your means. I’m not saying that simple is always easy but it doesn’t have to be anywhere near as complicated as some financial institutions and advisors would like us to believe. You don’t have to be good at math, a college graduate or earn a huge salary in order to manage your money well and build wealth. All you really need is a basic understanding of how money works (easily accessible online and via some great books) a simple system and a solid belief in your own ability to manage your money.