You don’t have to be wealthy to be smart with money, but you do have to get money smart to build your wealth. Let’s look at seven steps you can take to get there.
I wasn’t always money smart. In truth it scared me, usually because there wasn’t enough and I didn’t think I deserved it. But I got smart, firstly through necessity and secondly through experience.
And here’s the trick, it doesn’t start with finances, it starts with emotions,
Here are my seven steps that anyone can follow, get MESSIER with your money to get money smart.
There’s little point planning, budgeting or anything else if your mindset is going to undo all your good work before the positive effects have taken hold. Step one is to first commit to identifying any fear, shame, scarcity, stress or guilt that makes up your money relationship.
Your relationship with money is 90% mindset and 10% finances. These emotions will unconsciously feed your thoughts and in turn your actions. Spend time investing in yourself to understand your money beliefs and mindset.
These can be changed.
Seems obvious, if we earned more we’d be better off, right? This works well if you put the plug in (spending, see below) and if you’ve taken time to understand your past experiences and emotions and how these are shaping your habits. (mindset, see above).
If your earnings leave you short each month, even on a controlled spending plan, then set your Intention to focus on increasing your earnings.
Consider some ways you could increase your passive and earned income and note any actions you could take to work towards those goals. Commit to a date in the near future for each of these smart goals.
We’ll delve into increasing income more in the next couple of weeks, specifically looking at how to invite in more money and how to be truly comfortable with that increase.
Save (with purpose)
Save first. That’s right, before you pay a single bill, debt or gift, pay yourself.
Work with %percentages not £pounds as these will naturally increase as your earnings (see above) do. Saving has to be a consistent habit to be effective, but it also has to have a purpose. That purpose is yours, defined by you and in line with your values and your dream goals.
You might immediately be able to identify what you want to save toward, or you may need to spend some time understanding your values and personal goals first.
Make a start, it’s an ongoing relationship and your reasons can be redefined as you review.
Spend (with intention)
I don’t budget, I plan to spend. The word budget can feel restrictive and as we’ve got our savings covered now, it’s time to spend intentionally.
There are the ‘have to’ spends mortgage, rent food fuel bills debts and the ‘like to’ spends gifts, memberships and the ‘love to’ spends holidays and treats above and beyond.
Sense check if your earnings cover your ‘have to’ spends. After that set a purpose to each spend in line with your goals and values.
Invest (for the future)
Oh yes, scary word but, no it’s not. If you are employed in the UK the chances are you are already investing via a workplace pension so fear not, the world did not end.
Investing is the magical part as this is where your money works for you instead of you working for your money.
Check out our beginners guide to investing (coming soon) or jump onto our mailing list to be the first to know it’s been released.
Enjoy (every money win)
Absolutely, being money positive reinforces mindset, supports purposeful saving, spending and investing. It also reinforces the gratitude for the money and this positive experience keeps us on track and engaged.
When spending and saving make sure you put some of that aside for you to enjoy, truly enjoy. The more inline with your values this is, the more enjoyment you will gain.
Regularly checking in with your mindset and money plans, purpose and smart goals is so much more important than it sounds. Regularly create time to check in on the above 6 steps. Note what’s working and what’s not and do so without judgement or self-criticism.
Check in with your money thoughts as these will drive your new habits. Identify in which areas you are winning and where you could benefit from more support. Then put time-bound steps in place to work towards those and review again.
I’d love to know which of the seven steps to being money smart worked for you or what you need help with or, even better, your top money tip – please drop me a line and I promise to test the best!