Money is a powerful tool that has a direct effect on the things you can do in your life. It can give you freedom or tie you down. It can help you help others or make you feel completely helpless. It can give you the future of your dreams or make you feel like your dreams will never come true.
Whether you are in control of your money or it is in control of you is the only difference between these situations.
What I am sharing here will help you increase your financial literacy and show you how to take control of your money and start building the foundation for the financial freedom you desire and deserve.
Signs Your Money May Be Controlling You
Everyone relates to money differently based on their past experiences, most of which were shaped by how our parents and caregivers handled their own finances. For many people, that money mindset is one of defeat or scarcity.
To make matters worse, families rarely sit down to talk about building a healthy money mindset or the tools for building wealth, and our schools barely cover the basics of personal money management, investing or wealth creation.
Typically, the financial education that most people receive is about how to trade time for dollars, pay bills and maybe save money.
But as every millionaire knows, these are rarely the steps to how you make your money work for you, achieve financial independence or build true wealth.
Real financial freedom begins when you start developing your financial literacy and use your newfound knowledge to intentionally expand your wealth.
When you do this, you can finally stop reacting to the circumstances you face and start thinking ahead to the future and the lifestyle you want to create.
The place to begin is learning the signs that money controls you, so you can break those bonds and do exactly what you need to do to take control of your money instead.
Some of the signs your money controls you are:
- Depending on your paycheck as your only source of income
- Avoiding looking at your bank account or credit card balances
- Making financial decisions in reaction to the immediate circumstances
- Engaging in impulse buying
- Spending based on social pressure or other external expectations
- Unexpected expenses that become financial emergencies
- Having tension in your relationships because of money
- Feeling limited by what you can do because of your financial situation
If this is you, know that you have the power to change the stress that money is causing in your life—no matter what’s happened in the past, your financial track record or your current financial situation.
You do it by acknowledging where you are right now and getting to know your numbers, even though it might feel difficult. By doing so, you put the power in your hands, allowing you to take the steps you need to build your financial independence and start making your money work for you.
How to Understand Where Your Money Is Going
To take control of your money you need to know where you are right now, so you can start making a strategy to move toward the future you want.
It can be very difficult to look at your financial numbers when you have a lot of debt. Just know that no matter how much debt you carry, there is a way out. >>CLICK HERE TO LEARN HOW TO PAY OFF DEBT FASTER<<
Personal money management becomes easier when you know how much money you have coming in, where it is going and what is driving your financial decisions.
The first step toward building your financial literacy and financial independence starts with tracking your numbers which includes your:
- Monthly income
- Household expenses (including groceries, utilities, rent or mortgage, etc.)
- Credit card, lines of credit, payroll loans and other sources of bad debt
- Car payments, parking expenses or transportation costs
- Insurance
- Healthcare costs
- Lifestyle purchases like:
- Dining out
- Food delivery
- Subscriptions
- Streaming platforms
- Memberships
- Other expenses
You can do this with a simple spreadsheet or you can use an app. There are many great ones out there that you can leverage for financial success. Either one will help you see how much money you have and where it is going right now.
Next, it’s important to separate fixed versus variable expenses and necessary expenses from unnecessary spending that’s motivated by convenience, emotion or social expectations.
When you are living paycheck to paycheck and/or you want to start making your money work for you, it’s important to pinpoint where you can reduce unnecessary spending to increase the amount of money you can apply to paying down debt, building an emergency fund and put toward investing.
I like to help my clients build a spending plan that supports their goals and financial independence. A spending plan feels less restrictive than a budget, so it’s a positive way to develop your money mindset and take control of your money while you create your financial freedom.
Third, you build your personal financial strategy to make your future vision a reality. To do that you have to know what your future vision is.
Consider things like:
- When you want to retire
- What retirement looks like for you and your spouse
- The kind of lifestyle you want
- Ways you want to give back to the community
There are many areas you can explore to solidify your vision of the future. Take the time to do it because your vision of the future will give you a greater purpose to focus on and work toward as you navigate your financial decisions.
Finally, decide on the kind of assets you want to start investing in to expand your streams of income.
This is where you need to do your research because there are many ways to make money and develop your financial freedom but not all of them will be right for you.
Some examples of the things you can invest in are:
- Stocks
- Bonds
- Real estate (commercial, residential, short-term rentals, etc.)
- REITs
- Small businesses
- Creating your own assets
Everyone of these assets is an opportunity to increase the number of income streams you have. That means you can make money without having to trade time for dollars which gives you so much more freedom.
To really leverage that financial freedom and successfully build your wealth, you must always be aware of your money mindset and how it influences your money habits and financial decisions.
How Your Money Mindset Influences Your Decisions
I really love how a little bit of financial literacy changes the way you think about money and builds your financial confidence, as you take control of your money and develop financial independence.
As we said before, our money mindset is influenced by the way our parents, caregivers and authority figures thought about money, as well as our personal financial circumstances while we were growing up.
Our current circumstances can reinforce it or start to shift it.
For example, if there is a lot of debt, the financial decisions you make can come from a place of fear.
HIGH EMOTION = LOW INTELLIGENCE.
When we are stressed, we cannot make good decisions because the part of the brain that is used for critical thinking gets shut down, affecting our results. If they aren’t what we want it can reinforce a negative money mindset that continues to perpetuate the restrictive financial conditions.
But the human brain and mind is particularly good at adapting to new circumstances, so when we increase our financial literacy, it is easier to make better decisions about our money.
And when we get better results from those decisions, we increase our financial confidence and our belief that we can build the kind of wealth we want, creating an even more positive money mindset.
This in turn reduces the financial stress we feel, helping us to make more great decisions, as we shift our focus toward the things that really matter to us and our financial independence.
When you know there are simple steps you can take to build the future you want, you can leave scarcity thinking behind and start making the decisions that support your financial future. Which is why your bigger vision is so important.
When you can keep it top of mind, along with how the kind of lifestyle you envision will better support the people who matter most to you, it gives you a greater purpose to serve than the short-term gain you might get in the immediate moment.
This can help you to curb unnecessary spending habits like:
- Impulse buying
- Food delivery
- Convenience services
- Unnecessary expenses
Every time you make a choice that supports your future, you will feel better about yourself and the way you handle your money, further increasing your financial confidence and your ability to put your financial literacy into action.
Making money isn’t hard. It just takes a little know how.
Everything you learn and everything you do to support your financial future, like working with a financial advisor or working with a money mentor, will help you take control of your money and put it to work for you.
Build Assets, Not Just Income – The Practical Steps to Begin Taking Control Today
A paycheck can support your current lifestyle but assets help create long-term independence.
Assets give you what I like to call mailbox money—money that comes in without you having to trade time for dollars—which increases your financial freedom.
You are financially free when your monthly income from your assets exceeds your monthly expenses.
That gives you even more money to invest and make your money work even harder for you!
This is an amazing circle of wealth that every millionaire knows about and uses to consistently make more money.
And you can do it too!
All you have to do is take the same steps that they took to build their wealth.
When interviewers, audience members or clients ask for Sharon Lechter’s practical steps for building wealth, these are some of the things I like to share:
- Assets are sexy! Build or buy as many as you can. Every income stream you have gets you closer to financial freedom and the lifestyle of your dreams.
- Diversify across asset categories. It will protect you and your financial future when markets shift.
- Have patience. Making money takes time, consistency and dedication. Promises of fast money are investments that are typically risky and quite often fail.
- Know your numbers. What gets tracked and measured can be improved.
- Understand your risk tolerance. The better you feel about your investments, where your money is going and how it serves you and what you personally value, the more confident you will feel about your financial decisions. It will give you greater peace of mind.
- Do regular financial check ins. Just like any relationship, the more attention you give your money the more likely it is to grow.
- The only real shortcut in life, business and money is to work with someone who has already done what you want to do and has a proven process that others have used to do the same thing. Investing in a successful mentor is an investment in yourself, and it will pay you over and over again.
- Always do your research! The more you know the easier it will be to make decisions that support you, your family and your financial future. (A great place to start is with the resources on my website. CLICK HERE TO ACCESS THEM NOW!)
These are some of the things I have personally used to build my wealth, take control of my money and attain financial freedom.
Make Money a Tool, Not the Decision-Maker
Money is a great tool that can give you the financial freedom to live the life of your dreams. It really just takes dedication and consistency to improve your financial literacy and your confidence to take the steps to build your wealth.
While it might seem a bit overwhelming right now, every informed choice you make to pay down debt, build an emergency fund, control needless spending and invest in assets that align with your risk tolerance and values will increase your financial confidence and help you make even better decisions about your financial future.
Since you’re reading this, you’ve already taken the first step to improve your financial literacy and that’s a win to celebrate!
If you’re ready to take the next step, why not join the thousands of other people who have taken my Money Mastery course and gotten great results from it. Robyn Johnson, Founder of Best from the Nest, is a great example of success.
She said, “It wasn’t until going through the Money course and working with Sharon Lechter that I realized that it’s not magic. I can now manage my funds in a way that serves my family, that serves my employees, that serves the community that I work in.”
Like Robyn said, making your money work for you really isn’t magic.
Money Mastery will walk you through everything you need to do to transform financial stress into financial confidence as you build the money mindset that leads to the life of your dreams.