Five Lessons I Have Learned About Managing Money

Executive Summary

1)     Pay Attention

2)     Think Long-term

3)     Have some fun, but in Moderation

4)     Build a mindset that will allow success

5)     Put in the work

6)     BONUS: DON’T GIVE UP

Pay Attention

               Throughout my life, I have found that you need to keep your eyes on your finances. Building and saving takes a long period of hard work and dedication, and it can all be for “naught” before you know it with one bad decision. Let me put it this way, most of us would feel comfortable being within 10% of our budget, and feel that is a “good budget”. However, if you have household income of $100K, a 10% difference amounts to $10K per year…$10K worth of debt per year quickly escalates and puts you in a dire position rapidly.  Given that “life happens” and we are going to be faced with unexpected circumstances and events, we need to pay attention to the details and keep an eye out each month.  It also helps to put precautionary measures in place, such as an emergency fund so you have the financial resilience to withstand unexpected events. 

Think Long-term

               Having long-term goals and visions for our life gives us purpose and dreams.  It is important to learn to be happy with our current situation, so we avoid the pitfall of spending now and sacrificing the future. Having a clear vision of our future and where we want to go in life, helps to drive us forward and give us the motivation to persist even when life gets hard (as it will!).  I strongly encourage everyone to write-down their long term goals, and if they are having trouble mapping out a plan to get there or difficulty seeing how its possible, to reach out and speak with someone to help them (this is my particular passion – Achieve Dreams!). 

In a practical sense, I have also seen the principal of thinking long-term play out with financial decisions. More often than not, where there are “get rich quick schemes”, or a motivation to make a quick buck, it goes awry.  To succeed in the long-term, it takes dedication, perseverance and a mindset of gaining little by little. Compounding interest and time are your best allies to achieving your goals in the long-run – its not flashy, but it works!

Have Some Fun – But Do So In Moderation

               This lesson is one I have learned along the way, and definitely one that I developed more after marriage 😊.  Think about it like this: when you finished a school year/exams/degree etc., what did you reward yourself with (NB: even free time is suitable as a reward!). Typically, when we have a big hurdle or obstacle to overcome, we set rewards for ourselves so that we motivate ourselves to achieve the goal.  Why wouldn’t we continue this in our older years. By taking some time to “reward” ourselves for a job well done (and goal achieved), it helps to provide motivation for us to achieve the goal and move our “life” forward. In some cases, achieving the goal is the reward itself (Hello New Home!), but where its something more tedious that we need to take care of (ie) tax returns), a proportionate reward can be great incentive to get the job done!  Just make sure it is proportionate, and you still need to budget/plan for the expense (see Pay attention!)…you don’t want to create a problem for yourself by celebrating too much.

Build a Mindset That Will Enable Success

               This lesson is probably the most important one of them all in terms of being successful with your money.  If you read the May blog post, you will see that we all manage money differently, and there are seven different traits we all possess. Neither are right or wrong, its just who we are and our tendencies - like a personality profile, only with money!. That being said, if you don’t set yourself up for success (ie) the mindset that “debt is a part of life”), then it will be very hard to overcome. Setting up your mindset (and paying attention!), so that you have proper guards in place etc. is the way to go.  For me, whenever I am shopping, I have the mindset of “Can I achieve the same/similar result, for less”.  While I completely understand that convenience, value, and quality have a price, which can be worthwhile “investments”, by always considering whether I can buy something cheaper, and at the very least assessing if the extra cost is worth the added value I am receiving, I ensure that each dollar spent has a purpose. By having that mindset (even if its $1), it helps to ensure that each dollar spent is working for me, and maximizes my savings plan – achieving goals sooner. That mindset also permeates all areas, so it just becomes “a way of doing things”.

Put In The WORK

               This is not flashy, not fun, but worth it.  You have to put in the work, you have to set goals, be honest as you track your progress, budget regularly (and track your spending vs the budget).  I would also add that from a less technical perspective, you have to be prepared to make sacrifices in the short term so you can achieve your long term goals. A recent quote I read by Craig Groeschel stated: “Discipline is simply choosing what you want most over what you want now”. This to me, defines a “long-term” view, but its important to emphasize that you need to find your “why” so that you can ride out the hard times and make those sacrifices. For me, my “why” is to live a life where I can spend time with my family, meet all their needs and yet still be available to invest in our relationships.  Sacrificing early on in my life, enables me to follow a path that is “debt free”, and therefore lower expenses (which means lower income demands) while enabling a desired lifestyle. Do I assume that I never have to work again – absolutely not! However, by making intentional choices and putting in the work early (ie) making lunches rather than buying out regularly), I am able to live debt free now, so a lower income is feasible while still maintaining the lifestyle we want. I encourage everyone to find their “why”…when you do, it makes those sacrifices and the “hard times” far more bearable. Find your WHY.

BONUS Lesson: DON’T GIVE UP

               Let’s face it, life is a journey and you will have bumps and bruises along the way - it is inevitable. Don’t let that set you back though. Keep your long-term goals in focus, and do whatever is needed to get back onto the path if you get bumped (or pushed!) off! Be aggressive, be steadfast, be a LION and stop at nothing until you get to that goal! (But do enjoy the journey and stop for breaks along the way, just don’t stop for too long 😊). ONWARD!

If you would like to speak with someone about building skills so you pay more attention, have a mindset that enables success, and/or Find Your WHY, please don’t hesitate in reaching out! I care about seeing you achieve your dreams, and being committed to helping you on that journey. Would love to chat with you, and step 1 is always a free consultation where we get to know each other – you can book by clicking on the following link www.hopefinancialsolutions.ca/get-started. I would love to hear from you!

Chat soon!