Money Mindset: Take Control of Your Money Before It Controls You – Here are 5 tips
Have you ever taken the time to think about electricity or fire? When handled properly both of these forms of energy can enhance and add value to your life. However, when mishandled, these forms of energy can destroy your life. The same is true about money.
Money is an idea, a form of energy that travels through societies and cultures and even in your life. It has to flow for it to function properly. It has to flow in your life and be handled properly in your life for it to benefit you.
In short, you either control your money or it controls you. Here are five money mindset thoughts on controlling your money.
1. Have the proper money mindset
Since money is an idea, and form of energy that travels in and out of your life, you need to have an abundant money mindset. Know that you as a creative individual have the mental capacity to make as much of it in your life as you need for the life that you are designing.
Do not look at money as the end game. It is only a tool, like any other tool that is designed to help you live the life that you desire to live, in the way that you desire to live.
All the money in the world will not help if you do not know how to control it or know how to manage it. It will not help if you have not designed the life that you desire to live.
2. Manage your credit
We live in a society that is a credit driven economy. As such your credit score is a reflection of how well you manage the credit that was extended to you. The best way to manage this score is to simply pay your bills on time. Of course, we know that life happens and not always possible.
So the first thing to stay on top of is your mortgage and car payments. Secondly, you need to control your credit card spending. If you cannot pay these cards off every month, then maybe money is controlling you.
You need to simply take a serious assessment of your debts, ask yourself why you cannot pay it off every month and adjust your spending to correct this. Quarterly you should check out your credit report and confirm its accuracy.
3. Start a tax-deferred or tax-free plan
If your employer has one, invest in the salary reduction plan known as a 401k or even 403b plan. These are pre-tax options that you can start paying yourself first. They grow tax deferred and during distribution after 591/2 are reported as regular income.
If this is not offered at work, then start your own Traditional IRA or Roth IRA start investing in it. There are differences between the two, but they are ways to pay yourself first.
You could also start a permanent insurance policy that maximizes the cash value and minimizes the death benefit. This is another form of tax deferral and tax-free withdrawals late on in your life.
4. Manage your buying
This gets tied back to your credit cards and your credit score. You need to understand that humans including you always buy with emotion and then try to justify it later with logic. This is what can get you into trouble. You need to ask yourself why you are buying anything over and above the basics.
Do you really need the latest and greatest TV, or Refrigerator or Computer or vehicle? Maybe you could start asking yourself on any purchases over $200 why are you buying it? Will it add value to your life? Can you just pay cash with it instead of credit?
How much of your future time do you desire to spend with it to get your money worth on your purchase price? These are all valid questions that you need to answer to control your money.
5. Consider starting your own side business
It is one thing to go to work as an hourly or even salaried employee and get paid in exchange for hours spent. However, it is another thing to start your own side business, create a good service or product, and get paid for it. This is where you start to understand income versus expenses in a business along with profit and losses.
This is where you will even start to understand more about the tax code and how it affects your life. This goes back to point one where money is energy, and you as an individual have the ability to create wealth.
You will start to see that money is meant to enhance your life, not control it. This last money mindset tip is really about growing your money which should be one’s ultimate goal.