Your life is full of more money advice than you can possibly take in. Unfortunately, much of it falls into the “just give up that expensive cappuccino!” variety, which makes sense on the surface, but only applies to 0.001% of the population. The fact is there are no “easy” fixes to real financial problems. Changing your financial life is just as hard as changing your health, your relationships, or your career. So if you are tired of your money problems, open your mind, take a deep breath and read on.
Forget Your Goals
Chances are you’ve had the same financial goals for a long time now. “I want to own my own home.” “I want to live comfortably.” “I want to be debt free.” If these goals were going to fix things, you’d have checked some of them off the list by now. Unfortunately, for change to occur, there needs to be a clean slate. So stop trying to fix the ramshackle financial house you’ve built in your mind. Instead bulldoze it and rebuild from the ground up. To do that, there are a lot of other things you need to forget.
Forget What You Want to Own
You are currently surviving with what you own. If you weren’t, you wouldn’t be wasting your time reading an article on finances. This means that, at a fundamental level, you don’t need more stuff. This isn’t meant to be a judgment against struggling people who “waste” money on fast food or cigarettes that only the rich “deserve.” Instead, it’s a fundamental change in how you think about possessions. They just don’t matter until your money situation is fixed.
Forget “Saving” Money by Spending It
This goes hand in hand with the previous point but also applies to spending on essentials. If there is a great sale on something you want, but it means buying more than you budgeted, don’t. The hypothetical money you “saved” by spending more may feel good, but it won’t help you in an emergency the way money you actually save and put aside will. Having real money set aside for real emergencies is a must.
Forget Your Credit Score
Your credit score has one real purpose – to make it easier to take on debt. Sure, in the long run making good financial decisions will improve your credit score, but until you get where you need to be financially, it might as well be the high score on an old arcade game. Sure, it makes you feel good about yourself, but you might waste a lot of money achieving it. Save for emergencies and pay off debts that will make a difference to your long-term situation rather than paying off debts that will protect your high score. And never, ever try to improve your score by taking on new debt.
Oscar Wilde, who was no economist, once said “Life is never fair, and perhaps it is a good thing for most of us that it is not.” This is hard to accept. The world is stacked against you in many ways that you cannot change. There may be some ways that it isn’t but for the most part, you won’t notice those. If you are going to change your financial life, you cannot beat your head against the wall bemoaning the fact that some people get to have things you don’t and do things you can’t. Yes, it is unfair. It is also the way things have always been. The one comfort is that if you can tolerate that long enough to truly change your financial situation, then you have a better chance of becoming one of the people that other people are jealous of.
Informational credit: Accuplan Benefits Services, providing self-directed IRAs and 401Ks