Let me share with you my journey to a healthy relationship with money, it’s still a work in progress and I’m very far from achieving all my goals but every step taken until today is leading me towards success, if I can do it, so can you and everyone else.
I still remember how it started, I was a kid and I was drooling over a cake which was on the showcase of the corner bakery.
Not long after I put some serious gaze upon it, I ran straight to my parents asking for money to buy it, now I was never an asking for things type of kid but that cake was teasing me and calling for my attention.
While my mother picked up her wallet right after my request, my father stood in front of me and asked me: “do you realize how long you have to work to be able to afford a cake?”
The truth is that I had no idea how money happened to “exist” in their wallets, as far as I knew, my parents had the habit to leave home early every day to collect some fresh air and sunshine, to be honest, I was still very far away from the age where I was to start wondering about working, let alone the fact that nothing is free and everything is to be paid for precisely by working for it, so my answer to my father was an honest no.
He told me that if I wanted to have the cake, I would have to do some sort of work to have it.
I had just finished playing soccer with my friends that lived down the street and you can say I was feeling “exhausted” if that word has ever been applied to a kid, I politely asked him what I needed to do.
Out of the blue, he told me: “let’s bake a cake, we have the ingredients”.
I’m now aware that I had a very poor sense of a lot of things in life but that phrase immediately caught my attention and I could see that it made no sense to bake a cake in order to buy a cake afterwards, but hell, I could use some baking skills! In the meanwhile, he had told my mother to put the wallet away while I was not paying attention.
After the master chef class and all the mumbo jumbo involved, he asked me if I still wanted to have the corner store cake or if I’d rather have a piece of ours.
My mind was already made up, I decided to go for the one that we had previously baked, perhaps because of all the work I had put on the task.
Without realizing at the time, my father had thought me a valuable lesson that would only make sense a few years past.
There is no shortcut to having what you want in life, if you don’t have the means to obtain something you have to put in the work to achieve your goals, everything must have a certain balance, therefore, if you want to have something you need to give something (stealing doesn’t count).
If you want to have a healthy relationship with money, sooner or later you will have to accept and incorporate some basic rules in your life.
Do Not Overspend
If you have the means to obtain something of your desire for free take advantage of it, those are not common opportunities!
If free is not an option, bargain your way into the deal just like rich people do.
You’d be a fool if you think rich people would rather spend a single dime more than planned instead of bargaining for the best deal!
Seriously, you would be surprised how many times this works and helps you spend just the right amount.
Never Spend For The Sake of Spending
There is not a single soul in existence who mastered this habit without learning a hard lesson prevenient from a financial blow.
Cutting unnecessary habits, either the ones in the making or pre-established ones is crucial for financial success. Please notice the focus word “habits”, no need to feel guilty if you succumb to your will once in a while, in fact, it’s healthy to have a break sometimes, just not the bankrupt kind of break.
Understand The Cost vs Income
Live according to your financial limitations, I assume you have some (otherwise you would not be reading this), I know it’s easier said than done but this is a skill that you will naturally acquire just by living life and feeling the weight of responsibility.
You don’t need to be a math expert, in fact, it’s more of a mental strength test.
Start by subtracting your expenses to your income and anything that is still left split by percentages, for example, 50% for a savings account and another 50% to spend, apply this in a practical way that works for you, from practicing this step you’ll have a great headstart to further apply advanced steps with ease in the future, like investing.
Have a Plan
There is no point in saving if you have nothing to save for.
Find anything that motivates you and try to attach emotional values to your savings, whether your goal is retirement, buy your mom a gold Cadillac or a beach house to party 24-7, you get the idea.
This is important not only to keep your relationship with money healthy but also to maintain it with joy, it’s a painful and long process to reach your goals if you picture yourself running an empire in a few years, make sure you do it the right way.
Be Realistic About It
Unless you are somehow related to Jeff Bezos, Bill Gates or hit the Jackpot, chances are that it will take you a while to build a fortune.
Not rushing the process is just as important as having a plan, tax evasion and other “tricks” might work for a while but they are not worth the risk, put your focus on something positive instead.
More Money Does Not Equal More Spending
As your business or saving skills grow, you’ll find yourself generating more income and it becomes rather difficult to have a healthy relationship with your money, you don’t need to be very wealthy to go through this, just a minimal increase in your salary will have you experience this effect, this is the part where logic kicks in and you realize that by creating new spending habits, you’re crushing everything you have been working for, you are your worst enemy when it comes to money.
The more you “get rid” of it, the more someone else is willing to take it without hesitating.
You’re In For The Long Run
Just as it happens in the fitness world, in order to have a lean body you have to keep track of your calories, the same concept can be used here, in order to keep your bank account fat you have to keep feeding it for as long as you can, every wrong move will shed some weight off it.
Avoid Unnecessary Comparisons
Comparing is a benefit if done right, 99% of times this “tool” is not used the right way and doesn’t make much sense in the financial world.
We know for a fact that no matter what we, average human beings do, there is always someone, somewhere, that does it better, bigger, or works harder than us, this is visible everywhere around us.
Having this specific thought in mind you can tell that it makes no sense to compare your income to your neighbors, for me personally, financial comparisons are divided into two main categories, one in the form of empty and completely useless comparison (ex: I have more money than my neighbors, therefore, I’m a better and smarter person) and other in the form of strategic/constructive comparison (ex: this company generates more income than mine, time to take some notes and see which concepts I can grasp and apply to mine to share some benefits.)
Part of having a good financial position is also to be a good human being and understand that are differences that affect and shape every other human being’s life, the stereotypical rich guy image is embraced as a general truth but most of the times is misleading, rich individuals, high-income communities or companies add value to our society just as much as other social class, these are disciplined people that may seem relaxed but at some point in their lives, they almost certainly worked hard.
There is always something to learn both from richness and poverty.
Everyone makes unavoidable mistakes, the key to having a healthy relationship with money is to spot them in time and to actually learn from yours, success is not meant to be rushed, mental fatigue is one of your worst enemies, it can lead to laziness and kill your dreams if you ignore it.