Do you want to have less stress, feel more empowered, and break free of financial burdens? Hopefully, you answered ‘yes’ to all three. But, did you know that you can achieve all of these at the same time just by mastering your money?
That may sound too good to be true. However, when you’re bogged down by debt, you aren’t staying up worrying about how you’re going to pay for an emergency. Because you have the funds to cover an emergency or live your best life, you feel confident and fulfilled.
10 Powerful Ways to Master Money
In short, becoming the master of your money is a win-win. But, how can you make this possible? Well, here are powerful ways to master money.
1. Let go of the past.
We all have had our fair share of financial regret and setbacks. I remember when a friend received a couple of thousand dollars in inheritance. He was in his young 20’s so he pretty much squandered it –he wishes that he spent that money more wisely.
The same is true with financial expect Chris Hogan and his Ford Expedition. For five years, he made monthly payments of $600.
“If I’d invested that money in my 20s instead of paying the bank, I’d have more than $1 million extra sitting in my retirement account in my 60s,” he writes. “That ‘must have’ vehicle cost me a million dollars.”
“Everybody has regrets, especially when it comes to finances,” Hogan states. “But not everybody deals with regret in the right way. You could let that mistake weigh you down, or you could learn from it and move on.”
In my opinion, learning to learn from your mistakes and move on — is the first place to start — if you want to master money. You need to let go and deal with those mistakes by:
- Owning it. “Don’t blame somebody else,” advises Hogan. “Don’t point the finger at your life situation or your spouse or a great marketing ploy.” Hold yourself accountable and learn from it.
- Forgiving yourself. Beating yourself will only leave you discouraged and more prone to mistakes. “Your past doesn’t determine your future unless you let it, so move on.”
- Letting it motivate you. “Regret is a useless emotion unless you respond to it with action and a willingness to change,” says Hogan. For example, if you used credit cards too carelessly, then recommit yourself to getting out of debt.
- Telling your story. You don’t have to share it with the world through a blog post. But, reflect on your victories and failures to keep you on the right track.
2. Learn personal finance your way.
My grandfather, like so many other people of his generation, was a huge Frank Sinatra fan. As such, I get fairly acquainted with the music of Old Blue Eyes. And to this day, I’m still a fan of “My Way.” (I think even young entrepreneurs enjoy the phrase — “I did it my way.”)
I’ve applied the philosophy of doing it my way to my personal finances — and that’s not a stretch. But, let me explain.
Over the years, I’ve come across countless financial advice from everyone from my parents, peers, and experts. While I certainly listen to what they have to say, it’s not always applicable to me.
The reason? My goals differ from theirs. I might also prefer to improve my financial literacy through a hands-on approach while reading daily newsletters.
In short, when it comes to your finances, do what works best for you. As long as you’re reaching your goals, there’s honestly no right or wrong answer.
To get you started, though, here a couple of pointers:
- Establish short-term goals, such as creating a budget and reducing unnecessary expenses.
- Set long-term goals as well. These could be getting out of debt or retiring early.
- Prioritize your goals in order to guide you in creating a financial plan.
Keep in mind that when developing your financial plan that budgeting is key. Moreover, always contribute to your long-term goals. And, if you haven’t done so yet, build an emergency fund.
3. Stay motivated by making decisions.
Specifically, purposeful and conscious decisions. For example, let’s say that you want to tackle your credit card debt. To achieve this, you decide to cancel your Planet Fitness gym membership — which is $5 per week.
That may not sound like much. However, that’s $20 a month or $240 a year that you could put towards your debt. More importantly, since you made this decision that puts you in the driver’s seat, which will motivate you to keep on saving.
Charles Duhigg describes this in more detail in his book Smarter Faster Better.
“Motivation is triggered by making choices that demonstrate to ourselves that we are in control,” he writes. “The specific choice we make matters less than the assertion of control. It’s this feeling of self-determination that gets us going.”
In psychology, this is known as the “internal locus of control.” It’s been around since the 1950s. In a nutshell, the theory states that people can have control over the outcome of events in their lives.
To really make this stick, however, make sure that you revisit the prior point. In other words, make the appropriate decisions and actions that are right for you.
For instance, you choose to pay off your debt. The method that you’ll use will vary depending on the type of debt. The snowball method, as an example, might work for credit cards, while medical bills may require consolidation.
4. Understand that 80% of wealth is psychology.
Why do most people fail at making money? Well, according to Tony Robbins, “many people blame their lack of resources.” However, Robbins argues that “only 20% of the money game is mechanics while 80% is psychology.”
“If you think you can’t master the money game, you’ll find ways to sabotage yourself,” Team Tony adds. “Those who are wealthy turn obstacles into opportunities and see every failure as an opportunity to learn and grow.” But, if you “focus on your strengths and adopt an abundance mindset, you can get out of your own way and achieve monetary success.”
The Tony Robbins book — Master the Game of Money is still on every financial book list I’m asked to write. I listened to it first on Audible — but get a hard copy, read it, mark it up — and move toward a better financial future.
Despite what Robbins says — that “only 20% of the money game is mechanics, you still need the right tools to master this part of the equation.” These can include budgeting apps to books like Unshakeable: Your Financial Freedom Playbook. Other resources you can turn to podcasts, business mentors, or working with a financial advisor.
5. Have a “State of the Union” for fiances.
Every January or February, the President of the United States of America delivers an annual status report known as the ‘State of the Union.’ Its purpose is to measure progress and establish goals for the country. You can also apply this concept to your own personal finances.
To get started, block out a day or two in your calendar to conduct your annual review.
“State of {insert your own name here} Annual Financial Success Review.”
During this timeframe, you should be paying attention to your:
- Assets and liabilities, aka what your own and what you own.
- Income and monthly expenses.
- Credit report and score.
Reviewing this financial information will give you a better understanding of your financial health. Furthermore, you can then use this data to create a realistic budget so that you can reach the financial goals that you’ve set.
6. Pay yourself first.
The idea behind paying yourself first is pretty simple. Before you pay your bills, shop for groceries, or treat yourself, you set aside a percentage of your paycheck into a savings account.
Why? Because it guarantees that you will always be contributing something to your savings. It’s a better approach than scrambling to find this money after you’ve paid all of your expenses. Additionally, it only takes 10 or 20 minutes to set up an automatic transfer or split direct deposit in your savings account.
7. Choose your priorities.
My grandfather also passed on his love of travel to me. He also strongly recommended that I travel as much as possible while I’m physically able. Some people wait to travel until they retire, and that’s their provocative. But when you decide to do something differently — it takes making a different plan, and maybe a sacrifice to live this lifestyle.
Examples would be purchasing generic products or specific items only if I have a coupon. I also search for used products instead of buying new ones. And, I don’t have the most recent smartphone.
If traveling isn’t your bag, identify one or two spending categories that priorities for you. If you want to splurge on dining or clothes, then you’ll need to decrease your spending in other areas to accommodate your travel plans.
8. Develop self-discipline.
If you truly want to master money, then you need to become more self-disciplined — case in point, when you go to a store like Walmart or Target. You intend to go there only because you need to replace your recently broken coffee maker or cell phone case. Next thing you know, your cart is filled with items that you didn’t plan on buying.
Another example would be when a friend invites you out to a swanky restaurant. If you’re budgeting because you need a down payment for a new vehicle, you will have to politely decline this request. Perhaps this sounds low-budget — and it is — invite them over for a light meal at your place.
Obviously, turning down a get-together can be a challenge. To give me a helping hand, I employ strategies like removing my credit card information from online stores and carrying cash when I go out. I’ve also used services like Instacart to help prevent any impulse spending at the grocery store.
9. Become more resourceful.
According to Kristen Wong at Lifehacker, resourcefulness is the most important money skill that you should possess. After all, financial rules are useless without on-the-spot resourcefulness — since we all have our own unique situations.
I find it helps to think of situations beforehand if you can. If I prepare and run through a scenario in my mind a time or two — it saves me from being embarrassed later and helps me to stick to my plan.
Ultimately, this boils down to:
- Playing by your own rules. “There is such thing as being responsible to a fault,” Wong says. For instance, just because you’re paying back a loan doesn’t mean that you can’t occasionally enjoy yourself.
- Learning how to seize opportunities. Resourceful people are constantly looking for opportunities to support their bottom line.
- Forgetting the word ‘should.’ “We use status quo as our frame of reference, but it doesn’t have to be,” she states. A great example is owning a home to prove that you’ve made it. But, “just because you’re old enough to buy a home doesn’t mean you should, and in fact, it (buying a home) might keep you from reaching more important goals.”
- Focusing on what you can do, not what you can’t. “A resourceful person takes advice and finds a way for it to fit their own situation,” writes Wong. If it’s not applicable, then move on and find another way.
10. Protect your money by being assertive.
Sometimes you can’t negotiate on prices. Just imagine trying to do this at the grocery store. You can, however, negotiate everything from your cable and medical bills to insurance policies.
Just because you spent too much in the past doesn’t mean you will spend too much again. If you really want a padded wallet — you have to keep learning and try and try again.
You can make your financial journey a Master Money success.
Image Credit: burak k; pexels
