Surviving in today’s financial world is like whitewater rafting down a raging river. There are dangerous currents pulling at your money that threaten to capsize your future and expenses that try to smash your fiscal plans into the rocks. But, to those who know how to navigate the treacherous and fast-moving waters of money management, the ride can be exhilarating!
Where do you begin the process of becoming someone who seems to glide down the churning and chaotic river of personal finances? Answering this question is complicated. The amount of information available dealing with how to handle your money effectively is mind-boggling. Doing a quick Google-search using the keywords “money management” yields over 59,000 results. Everyone’s got an opinion about money. However, there is a healthy place to start: learning to think about your money correctly.
Here are five thoughts that can help create a more positive and powerful outlook on your finances.
- Don’t Have a Fear-Based Mentality
It is easy to become afraid about money when you realize that the average American household has over 15,000 dollars in credit card debt, and that just a few quick “shopping spree” clicks on your smartphone or an unfortunate case of identity theft can prove to be a disaster for your bank account. But, fear can be minimized a great deal simply by educating yourself.
The fact that you’re reading this article right now shows you are taking steps in the right direction. Knowledge is power; and when it comes to money, knowledge is the key to controlling your finances rather than having them control you.
Your desire to know more must also be mixed with patience. Build relationships with people who understand how money works, let them steer you toward books and articles to read. Talk with them. Through information and guidance, you will eventually build a fiscal plan you can trust.
- Budgets Are Not Evil
It is almost a reflex to cringe whenever you hear the word “budget”. Who has time for them? They can be tedious and unpleasant, often exposing things about our spending habits that we’d rather not find out. But, to those serious about achieving financial peace, budgets are a powerful tool; they give you knowledge about you. They can also help build boundaries that create confidence. When you’re sure about where your money is going and where it should go, you can rest more easily, knowing that you will be able to live within your means.
- Think to Earn, Not Just to Save
Author and multi-millionaire, Steve Siebold says, “The masses focus on how to protect and hoard their money. The wealthy also know saving is important. But they know earning money is even more important.” Making your money make more money is an art form. The entrepreneurial culture is difficult to break into and the investment world is difficult to trust.
Still, there is always room for a good idea to make a modest financial splash and there are ways to play it safe when it comes to investments; especially for those just starting out. You don’t have to mortgage your house and risk you kids’ college tuitions to make beneficial earnings. Start small until you gain confidence and experience, then go from there. With planning and perseverance, you can make your money work for you.
- Think Long-Term
The “start small and grow” philosophy is part of an overriding mentality that thinks long-term regarding money. Life in the now always tempts you to react with urgency – You need to sell off those stocks because they might plummet! How are you going to ever afford a home with enough space?! You need more money now!
Sound money management isn’t about seeing huge upward swings in your balance sheet right away, it’s about sticking to the plan and weathering the storms. If you have an ultimate financial goal in mind and you can see steady progress toward that goal, even small, steady progress, it would be foolish to react impulsively.
An experienced whitewater guide is not afraid of huge, noisy rapids. Rather, such a guide knows how to use the power of the river to propel through the drop offs and stay afloat in dangerous waters—a good guide uses his or her head when reacting to what’s happening. You can become that kind of “rafter” on the river of personal money management; shooting through the rough water that must be confronted and conquered in order to bring fiscal piece of mind. It all starts with seeing your money and what it can do for you in a healthy way.
