Everybody has a money story; it is a reflection of your actions when it comes to money. Think of your actions as the language of your money story.
You can choose to buy or not buy, to save, to invest, to decide not to decide. Each of these decisions combines to form your money behaviours and reflect your beliefs, and ultimately determine your success.
There are things you can do to redefine your money story and set yourself up for success. Let’s take a look at 10 tips you can apply now for a better money story…
1. Have a Money Mission Statement
Imperative to your success is having a money mission statement. Your money mission statement should define the core of your financial goals and the principles underlying them.
It should outline the meaning, use, and value of money to you, both in a short and long-term timeframe.
And for extra bonus points, you should keep your money mission statement where you can see it on a regular basis – put it on your computer or desk.
By reviewing it periodically you can refine and update it to accurately align your decisions with your purpose and philosophy with money.
For example, part of my money mission statement goes like this: “The more money I make, the greater the impact I can create”
2. Have a Plan
Create a plan that outlines your strategy and financial plans…
The plan should include your savings and investment plans that are in complete alignment with your money mission statement.
It is important that your plans have been well-informed and are developed on facts and not emotions.
As with your mission statement, it is good to review your plan periodically to make sure it reflects your purpose and the most up-to-date information.
3. Stick to Your Plan
This might seem like an obvious statement. You would be surprised by how often I come across people that say they have a plan but their decision-making is not in alignment with what they put in the plan.
When times are tough, be it when markets are falling or money is tight, the simplest and best advice you can receive is to stick to your plan.
On the flip side, in times of success, when things seem to be coming easy, money is flowing, and your wins are adding up, it’s still important to stick to your plan.
Most of my experience suggests that deviating from your plan is what will cause you more pain and loss than any other element of your financial journey…
I had a client a few years ago who was doing well in the stock market, he was trading in a short timeframe and having some success. He had a good trading plan that was working…
And then after a number of winning trades in a row, I think it was 8 at the time, he decided to double his risk amount in each trade. Sure enough, within a matter of days, he had lost everything he had made in the 8 winning trades and a little more.
When he came to me all I did was ask him what his plan was and compare his actions to his plan… the lesson was short but effective, stick to your plan.
4. Seek out Mentors
This is a lesson I wish I had learned long before it finally hit home for me…
As you embark on investing activity you should seek out people who can assist you and who have knowledge in the area that you are planning to participate in.
This is not a weakness in you, instead, it is a demonstration of emotional intelligence. You are acknowledging that you need more information in an area that you are not currently an expert.
Look for people who have been successful and can provide you with additional perspective on the investment vehicle or activity that you want to pursue.
You can also look to form a mastermind group with people with whom you can share ideas and who can hold you accountable to your money mission and plans – they can further refine your money story.
5. Look at Expenses in Detail
This is an important action item…
Most people go about their lives with a rough idea of how much they spend and how much it costs them to move from one paycheck to the next.
To be successful in creating financial freedom, you need to know your expenses in detail.
Spend the time to analyse what your life costs, know the number because this is your life and your dreams that you are trying to achieve.
The power of knowing this number is that it also provides an insight into what you require for financial freedom…
Think about it, if you could cover this number each month or week, whatever period you choose, you can attain a basic level of financial freedom. And I suspect that excites you, even just a little, right?
Life is a constant juggle of the many demands on your time and energy…
There are money and finances, family, health, friends, work, fun, your contribution, and taking care of yourself.
You need to prioritize and plan your pursuits in each of these areas of your life to establish a reasonable balance.
Understand that your plans are not static, you will be constantly making decisions, even on a daily basis, to align your plans and priorities with what is important to you now.
When it comes to your money story, you need to ensure that you prioritize action in areas that will progress you toward your goals.
7. Align your Internal Ideals with Your Financial Goals
Your internal ideals, that is your internal model of who and what you are, creates the unspoken assumptions on which you operate…
Clarify your external goals to be certain they align with your ideals.
The key is to ensure that there is a fit or consistency between your internal and external goals and that what you want to accomplish is consistent with your ideals.
When you have consistency it can provide structure and direction to your ambition… kind of like a map.
8. Differentiate Needs and Wants
This is one of the most important wealth creation concepts you can learn…
Understanding the difference between needs and wants, and applying it to your life will save you many thousands of dollars every year.
Simply, a need is something that is essential, such as nutrition, sleep, and security (housing)… a necessity.
A want is something that you desire, like chocolate, alcohol, handbags, and golf clubs.
The lesson is to ensure you have enough to meet your needs before your wants.
“You can never get enough of that which you don’t need”
9. Determine What is Good Enough
This tip relates to the pursuit of perfection and the struggles that can cause. Perfectionists operate in the paradigm of constantly wanting more. More is not a goal…
More money, like perfectionism, is a pursuit that is never satisfied. In fact, the dream of more is a guaranteed plan for failure.
The solution is to have an understanding of what is good enough…
By having a defined goal you allow yourself the satisfaction of the sense of achievement when you arrive at the goal.
And then you reset your goals and continue.
10. Know What Achieving Your Goals Will and Won’t Do
Money can provide pleasure, luxury, and freedom, but it may not make your relationships better…
It’s important to know what achieving a goal will do so that you have the clarity to distinguish what it will not do.
Reaching a goal will not undo the past, or make other troubles go away. Be clear about the person you will be or want to be when you attain a goal, it’s a good way of knowing whether it is worth achieving or not.
So there are 10 guidelines to form or change your money story. By taking the time to define your story with these guidelines you can demystify money and the control it has over you.
Money is intended to be a powerful positive force you use to shape your life in the way that you plan and dream. A good thing that is.
Take ownership of your money story and start living the life you choose.
Let me know in the comments below which of these tips you will be applying to your life from today. I want to know 🙂