You Can Do This

Whether you’re supporting yourself for the first time or you’ve been on your own for a while, choosing to improve your financial health is a brave step. Make no mistake: the journey from financial Foundations to financial Abundance is going to be challenging. But it will also be incredibly rewarding.

As you go through the steps outlined in your Financial Priorities action plan, it will quickly become clear that understanding the steps to achieving financial success is easy. But actually completing each step will take effort and grit. However, by adopting the right money mindset, you will be able to overcome obstacles and achieve your financial dreams.

The mindsets below are based on advice from personal finance experts as well as psychologists and writers who focus on habits and goal setting. Let’s have a look.

1. Money Is A Tool, Not An Objective

We’ve all heard phrases like “Money is the root of all evil.” Hearing this can make it a struggle to appreciate money for what it really is: a tool and a resource. Like all tools and resources, money can be used to achieve a wide variety of objectives.

When you see money as a tool and not something inherently good or bad, you are more likely to maximize its potential. You can use money to positively affect the world around you. Jenn Sincero, author of You are a Badass at Making Money, calls this “finding your ‘why.’” Find out why you want something, and then, determine if and how money can help you achieve it.

2. Setting Specific Financial Goals Will Help You Achieve Them

“SMART” goals stands for Specific, Measurable, Achievable, Realistic, and Timely. The SMART framework has been used by governments, businesses, and individuals to help them set and achieve goals.

So whether it’s a specific income, savings, or spending goal, make it a SMART  goal. Doing so will make it easier to get started, make progress, and eventually achieve your goals. (We’ll dive into SMART goals more later.)

3. Small Steps In The Right Direction Make A Difference

Financial goals can be overwhelming. But in personal finance, big results come from small steps in the right direction over time. What’s more, often without us changing anything at all, these steps will build a positive momentum all their own. For example, when you pay the same fixed amount toward a debt, every month a larger share of that payment will go toward principal and a smaller share will go toward interest. In effect, you’re increasing the speed by which you pay down your debt. With savings, the same effect happens but in the opposite direction. The more money you have, the faster it will grow due to compounding interest. 

So while the best time to start tackling your financial goal was yesterday, the next best time is today. And you’ll be glad you did.

4. Be Pessimistic About The Short-term

In the short-term, expect something less than a good outcome. In other words, plan for unexpected expenses, losses of income, and drops in the value of your investments. If your short-term mindset is pessimistic, it’s easier to absorb the shock and move forward. If things go well, you’ll never regret having been prepared for something worse than what actually happened.

5. Be Optimistic About The Long-term

In order to grow anything – including your wealth – you have to invest…in something. It might be an investment of your time, energy, or your money. But investing assumes an eventual benefit and therefore, an optimism that things can and will get better.

In personal finance, there is great evidence that in the long-term, investing the right way will provide a great return. For example, in The Simple Path to Wealth, J.L. Collins outlines reasons why over 20+ year time horizons broad market indexes have always gone up. Similarly, in Morgan Housel’s book The Psychology of Money, he highlights why those with a short-term pessimism and long-term optimism almost always fare very well financially.

6. Follow A Plan to Improve Financial Health

Improving financial health can be hard, but it shouldn’t be complicated. You just need a solid plan in place. There are choices you’ll need to make along the way and a few things you’ll need to track regularly.

But the truth is, the basic rules to achieve financial health and wealth are universal and timeless. The nuances to succeed more quickly or within the specific circumstance of your financial environment can easily be learned. And the advanced and truly personalized parts of personal finance you can get help with when you need it.

Build Your Money Mindset with MoneySwell

With MoneySwell you have tools to master the basics and create great financial habits. You have a plan to get ahead based on your current circumstances. And finally, you have the resources to understand the nuances of the personal finance landscape. By the time you’re ready for the final bits of financial optimization, you’ll have such a solid foundation in place that your financial planner will be genuinely impressed.

If you build a money mindset based on the items listed above, it won’t be long before you see progress. And sooner than you may have expected, you’ll be well on your way to achieving your goals.