Being good with money isn’t just about making lots and lots of it. It’s about learning what to do when you get your sticky paws on it. There are heaps of people making big money who don’t have two red cents to rub together. Driven by emotion or determined to stay ahead of the pack, they spend everything they make and then some. And there are others who, despite making less, are able to squirrel away a little sumthin’ sumthin’ to help them meet their goals and take care of their future selves.
If every time you get some money you can practically feel it burning a hole in your pocket, you may be a spender by nature. But that doesn’t mean you have to keep doing things that work against you. Having 30 lipsticks or 50 bottles of nail polish, or always rushing out to get the latest game for your console of choice isn’t getting you any closer to your goals, is it? So change what you’re doing!
The first step to changing how you see and use money is understanding what drives your behaviour. Your money personality has likely been shaped by a lot of different factors from the way your own parents communicated (or didn’t), to your sense of where you fit in among your peers, to your own sense of self.
Let’s say you suddenly inherited $25,000. It came from an old aunt you barely knew so there’s no sadness attached to the money. Would you:
- Immediately set about making a list of all the stuff you can buy yourself and your family/friends?
- Stick most of it into savings for your post-secondary schooling?
- Wait a while and ponder, giving yourself enough time to think about how you’ll use the money?
- Try to turn that money into more money by investing it?
- Give most of it away; it really wasn’t your money anyway?
Think about the answer you chose. What do you think your answer says about how you feel about money? Is it just a way to get all the things you want, or can money help you achieve something that’s really important to you? Are there in fact things that are really important to you? Like what? And if you give away money, how does that make you feel?
Being aware of how you feel about your money, and watching what you do with it, is an important part of taking control. There are heaps of people — young and old – that still haven’t figure that out. They work hard to earn money only to find at the end of the day they don’t know where the money has gone. They refuse to keep track of what they’re making and spending. Their record-keeping is disorganized or non-existent.
If it hasn’t yet occurred to you, not paying attention to the detail is deadly when it comes to money. So, when you think about financial record-keeping, which of the following responses is closest to your gut-reaction?
- I don’t keep records; there are more important things to do with my time.
- Yeah, I do that… sometimes.
- I like keeping my bills and my money organized.
- I don’t even know what I should be keeping.
- I don’t have any money so I don’t need to keep records.
We can always, ALWAYS, find excuses for not paying attention to what we’re doing with our money: no time, no money, no need. But those are just excuses and if you’re using one of them, or being lackadaisical about your money, you shouldn’t be surprised when you run out of cash.
Most of what it takes to be smart about money doesn’t require a whole lotta book-learnin’. But you do have to be disciplined enough to figure out where you want every penny to go. Yes, every penny. If you can’t be bothered, then you shouldn’t be whining when you run out of it, go into debt and feel like you’re drowning. It’s your money and you control it, or not.
A lot of money is going to pass through your hands over your lifetime. Paying attention means you’ll know you’re doing just what you want with it.