Wise thinking is key to a better financial future.
Otherwise, you might find yourself heading into a financial disaster, especially if you let any of the dodgy mindsets that we are going to mention in this article override your common sense.
Consider the following then, and take heed. If you can relate to anything that we suggest below, it might be time to correct your thinking, as you will only hurt your current and future financial position if you don’t.
These are the faulty mindsets that you might need to deal with.
Faulty Mindset #1: It will never happen to me
This is the mindset that will prevent you from making savings for your future.
You assume your job position is safe. You don’t think your property will be targetted by burglars. Perhaps because you care for your health, you might assume that you will never get sick. And there might be countless of other situations that you, in your perhaps dodgy way of thinking, assume won’t befall your life.
But here’s the thing. You will only regret this faulty way of thinking when yes, something does happen to you. You might get made redundant. Your home might get burgled. You might get sick, or you might get involved in an accident that requires medical care. And being fallible, lots of other mishaps could happen to you, any one of which could scupper your finances.
So, don’t tell yourself ‘it will never happen to me.’
Instead, use your common sense and remember that you can’t reasonably predict every future event that is going to happen to you. Start putting money away into an emergency fund, as you will then have something to fall back on should the unthinkable happen. It’s better to be safe than sorry, after all!
Faulty Mindset #2: I will always be in debt
You probably have debt in your life already.
It might be from a car loan, a credit card that you have maxed out, and more typically, it might also be from your mortgage.
Many of us are in debt, and we get used to the fact.
And being used to that fact, you might have let it become a norm in your life. Rather than getting on top of your debt problems then, you might procrastinate, as you are used to living a life where you owe people money. You think nothing about those monthly direct debits leaving your account each month, each one going to one creditor or another. You might resign yourself to the ‘fact’ that a large part of your paycheque will be missing each month. And consequently, you continue to live a life with less financial freedom than you would otherwise be allowed.
So, here’s the thing. Don’t let debt become a normal part of your life. It doesn’t have to hang over you month after month and year after year. Imagine what you could do with the extra money that wasn’t used to pay off your creditors. A new car? A family holiday? A new house? These things would be possible if you had more financial freedom.
Take actionable steps then. Start to pay off more than the minimum amount on your debts each month. Consult with a debt-relief charity for advice on managing and paying off your debts, or consider asking for legal help. With the services of McCarthy Debt Settlement Law, for example, you might be able to settle your debts sooner than you expected.
And speak to your creditors too. It might be that they will stop charging you interest if you can show them that you are struggling, or they might offer you a payment plan that helps you to clear your debts quicker than your current payment term.
Think then. Don’t tell yourself ‘I will always be in debt.’ Instead, remind yourself that financial freedom is possible, and then take steps to achieve it.
Faulty Mindset #3: I shop, therefore I am!
This is about basing your identity on the things that you own.
You might think that buying a flashy new car will show people how cool and privileged you are. Or you might assume that a classy new suit or a high-end smartphone will let your business clients know how professional you are.
And while these purchases might elevate your identity, they might also land you in financial jeopardy if you don’t actually have the money to pay for them.
And what happens then?
You won’t look so cool in front of your peers when you are forced to return the car back to the dealership. Your clients will see through your professional image when you run out of funds to better manage your business. And the identity that people see might not be one that is cool or professional, but rather one that is frivolous and careless.
Of course, your identity is more than the things you own anyway. While you can cultivate an image with your purchases, there are other ways to showcase who you are without spending money.
Be sensible then, and rememember that your identity is also based on how you live your life, and not on the items you have in your possession.
Faulty Mindset #4: Just one more won’t hurt
It’s not always the big purchases that affect us financially, but it’s the little purchases too.
You might put one too many luxury food items into your shopping trolley. You might have an extra drink or cake when you’re out with your friends. And you might buy one extra lottery ticket when you’re standing at the store counter.
These things don’t matter, do they? Especially with that lottery card, the odds might be in your favor anyway! Or so you imagine. As these stats show, your odds of winning are actually quite unlikely. While we wouldn’t put you off from playing, you should be wary about assuming just one more lottery card won’t hurt when you’re at the store. This might be your first step into a gambling addiction.
And think about those other items you buy. Assuming that one more purchase won’t hurt your finances is a mistake, even when it comes to the smaller things. Do you really need another cake? Do you really need another bar of chocolate? These smaller costs mount up, and when looking at your bank statements at the end of each month, you might be surprised by just how much your frivolous spending has cost you.
What we are saying (in rather a long-winded way) is this. Be responsible with your spending. Treating yourself every now and again is fine, but you should still set yourself limits. Take steps to budget your money, so you don’t make any bad financial decisions, even small ones, as every dollar you earn should be respected and used wisely.
By not buying ‘just one more,’ you will have more money in your bank account, and this extra cash could go into your savings or emergency fund. Think before you spend then!
Faulty mindset #5: I can’t be bothered
We aren’t saying you’re lazy, but…
If you can’t be bothered to switch to a new insurance or utility provider, you might be spending more than you should be.
If you can’t be bothered to seek help for your debts, then you might never climb out of the pit that you might be in.
If you can’t be bothered to look for a new job, then you might be reducing your chances of a better income if your current position isn’t supporting your lifestyle.
If you can’t be bothered to budget your money each month, then you are going to run into financial difficulty somewhere down the line.
If you can’t be bothered to save for retirement, then you are going to regret this choice when you’re old and poor.
And if you can’t be bothered to act on anything we have suggested within this article, then let’s face it, you only have yourself to blame if you don’t have enough money to live on.
In short, don’t be lazy! To improve your chances of a better financial future (as well as a better financial today), you need to do something with your life. Doing nothing is not a sensible option.
So, be bothered, as your life will change for the better if you overcome your inertia!
What about your mindset?
Do you implement wisdom into your thinking?
Or, within the context of this article, do you…
- Assume that nothing bad will ever happen to you.
- Imagine that you will always be in debt.
- Spend more money than you should to prove something to others as well as to yourself
- Spend frivolously under the assumption that it doesn’t matter
- Do nothing to help yourself because of a complacent attitude.
If you can relate to any of the above, then you need to correct your thinking. Not only are you hurting yourself if you don’t, but you are also hurting those people who depend on you financially.
Today then, work out where you might be going wrong, and take steps to correct your cognitive mistakes. You will benefit if you do, and your future will be a much brighter and financially stable one!