One of the most important steps to grow money is to create positive monthly cash flow. This allows you to regularly put aside money that can be invested. Reducing expenses lacks the upside and excitement of increasing income, but it usually just involves a mindset shift, and not necessarily more work.
Conscious and wise spending always make sense, and I prefer this attitude over cheap and frugal. During those leaner times in my life, I have found the following money mindset tips helpful.
Look How Far You’ve Come
Think about how much money you made earlier in your life when you earned less, and compare that to your current household monthly income. I know that I managed to live just fine on the income I had earlier in life; this thought empowers me.
Recognize That It’s Just Plain Fun
Have an attitude that makes reduced spending a pleasure. As someone who loves the challenge of finding good value in anything, whether it’s an undervalued piece of real estate, a company stock, or a piece of my favourite John Hardy® jewellery, I truly believe that living within your spending plan is a mindset that can be enjoyed. Besides, how much fun is it to share with a girlfriend when you get a great bargain on a purchase?
Develop a Value Based Mindset
Enjoy the treasure hunt and apply it to bigger purchases in your life. For example, you can save thousands by purchasing a low mileage, used, good-quality car instead of a new one that depreciates five percent when you drive it off the lot. You can buy a foreclosed property needing some TLC as an investment or as a home. Develop and use a mindset of always buying value, especially on higher priced assets, to get to your financial goals sooner.
Have gratitude for what you do have. Think of all the people in the world who would gladly swap places with you. Instead of feeling frustrated that you can’t be a member of the top country club right now, appreciate that you can play golf at a wonderful public course or swim at a neighborhood pool or at a beautiful lake. Always focus on what you do have, not on what you are lacking.
Get Out of Your Box
Realize that your level of wealth is all completely relative. In the above example, the person who cannot spend on the country club membership doesn’t have an awareness of the person who would love to be able to just buy golf clubs. Boxes keep you trapped and can create negative emotion around your money. Get out of your own little box and step back a box or two to have true gratitude for what you do have because, no matter what box you are in, there will always be a bigger, better and more enticing one.
There is always more to accumulate, and focusing on what you don’t have will always leave you feeling needy. Live in a place of gratitude to expand your wealth mindset on the journey to your financial goals.