Humans are creatures of habit, and unfortunately when it comes to money many of us have picked up a few bad traits over the years. Our money mindset can really make a difference to our life.
However, we all have the power to change, and if you make an effort to ingrain positive financial habits into your life chances are they will end up sticking.
Here are five easy ways to change your money mindset, forever.
1. Save 10 per cent of your income… without fail
Many people have the money mindset that they ‘just can’t save’, but everyone can save something. Every time you get paid, send at least 10 per cent of your income to a high interest savings account that you simply don’t touch. If you receive a salary, set up an automatic debit from your transaction account to a separate investment account to make sure this always happens. This may not be enough to achieve all your financial goals, but it’s a great start.
2. Become a year-round negotiator
From bank fees to televisions, gym memberships to insurance, you’d be amazed at how many things are negotiable. You’ll be even more amazed how much you can save when you commit to negotiating on every transaction you make.
WATCH: Top tips for improving your negotiating power:
To do this, you need to be informed about the product or service you’re buying, leave any emotions at the door and always be prepared to walk away. Yes, it takes up a bit of time and confidence, but the savings will be more than worth it.
3. Give 15-minute monthly ‘money love’
We understand that learning about money isn’t everyone’s cup of tea, but you’re doing yourself no favours by staying in the dark about finances. Take the time to think about your financial goals and how you will achieve them, then build a basic budget and make sure you’re living within your means.
If you have amassed big credit card and other bad debts, put a strategy in place to pay them off as quickly as possible.
Every month set aside just 15 minutes to THINK about your money and give it some love. Not to pay bills or do financial admin, but to set goals, assess how you’re doing financially, or adjust behaviour. In other words, working on your finances rather than in them. If you’re a couple, it makes sense to have this 15-minute session together.
4. Take super and insurance seriously
When it comes to money, superannuation and insurance are often put in the too hard basket. They seem complicated and you don’t benefit in your regular day to day life today. However, changing your money mindset about superannuation and insurance is vital to your long-term financial well-being.
For many people, their superannuation account is their single biggest asset. It will determine your lifestyle for 20 or 30 years of retirement. How much thought have you given to how it’s invested and the fees you’re paying. The Money Makeover will show you how to get informed and take an interest in your superannuation to maximise your nest egg.
Meanwhile, insurance could be the only thing standing between you and financial ruin. Make sure you understand your policies and read the fine print. Are you adequately covered?
5. Set aside an ‘opportunity fund’
An emergency fund is money you set aside and don’t touch unless you really, really need to, and we think this is a great idea. But instead of thinking about this as money for an emergency, we prefer to think about it in terms of the opportunity it affords you.
We recently heard a story about an American named Matt Becker who lost his job, but used the financial flexibility that his opportunity fund gave him to take a chance and start his dream business: a financial advice firm for new parents.
It’s a good story, and goes to show that improving your money mindset isn’t just about having a bulging bank balance.
It’s also about giving yourself the opportunity and flexibility to make good decisions in your life.