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Each year, millions of Americans set big goals with the desire to improve some aspect of themselves. Whether it’s losing weight, learning a new skill, or saving money, studies have shown that majority of the time we fail. The process of reaching goals are easy. Deep down we all know when we make healthy food choices and exercise regularly, we can lose that stubborn weight. The same holds true with money. When we consistently make better financial decisions, we can build wealth. If we know the answer, why is it so hard to stay on track?
It all boils down to mindset and habits. Einstein once said, “We cannot solve a problem on the level of consciousness that created it.” Let that sink in. In order to create lasting change, you have to dig deep to understand why you behave the way you do and be in a mindset where you are ready to change. When you’re ready to change your behavior, it’s easier to develop the habits needed to make progress toward your goals. Here are a few tips on how to get on track to making better financial decisions.
- Change Your Money Mindset: Your money mindset is your unique attitudes, perspectives, and beliefs around money. This mindset is formed from your lived experiences, from your childhood to the present, and it is directly connected to your financial habits. This article has several exercises that you can use to understand your money mindset and offers suggestions for how to shift your money habits and behaviors.
- Evaluate Your Current Situation: With so many influences around us, like friends and family, social media, and clever marketing and advertising strategies, it’s hard to distinguish between what we actually want and what we’re conditioned to like or value. Taking a step back to reduce distractions and reflect on the life you’ve created will help you decide what’s really important. From there, you can connect the dots between what you value and how you spend your money.
- Shift Your Money Habits and Behaviors: Developing basic financial knowledge and learning how to manage your money are essential skills that set you up for success at every financial level. There are several resources on forming better habits and breaking bad ones. You’ve probably heard that it takes 21 days to form a new habit. Money habits are complex and can take even longer to form, so be sure to give yourself a little grace along the way.
- Seek Therapy: Some of you have had traumatic experiences around money and the idea of working through the past on your own is overwhelming. In addition, becoming the first high earner in your family after growing up with modest means can be hard to process. If you’re having trouble figuring things out, I encourage you to seek professional help. A general therapist can be effective or you can seek a therapist that specializes in financial issues and needs.
5 Signs You Shouldn’t Buy a House Yet
The housing market has boomed over the last year, despite a global pandemic and millions of Americans struggling to make ends meet. It’s important to make a thoughtful, informed decision when it comes to buying a house. I explain five signs you’re not quite ready to buy here in my latest Business Insider article.
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New on the Worth Listening Podcast!
Episode 109: Property and Casualty Insurance
Property and Casualty insurance is not discussed often, and being uninsured or underinsured can be detrimental to your finances. Whether you drive Uber or Lyft for extra cash, list your property on Airbnb, or rent a car, you should understand if you’re properly covered. Lauryn and I speak with guests Meaghan Dowd and LaTanya Simmons about the types of insurance you need to cover your property and protect your hard-earned assets. Check out the episode here.
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Episode 110: Building Wealth & Financial Behaviors with Dr. Sarah Fallaw
Lauryn and I talk with guest Dr. Sarah Fallaw about the financial behaviors that are important for wealth building. Sarah is the co-author of The Next Millionaire Next Door with her father, the late Dr. Thomas Stanley. I read Dr. Stanley’s book, the Millionaire Next Door, early in my career and it changed how I think about money. Check out the episode here.
You can also listen to the Worth Listening Podcast on Apple Podcasts, Google Play, and Stitcher.
Do you need help changing your money mindset so you can turn your income into wealth? Let's chat!
Cheers,
Chloé A. Moore, CFP®
Founder, Financial Staples
Was this email forwarded to you? Join our mailing list here and receive free access to our guide: Budgeting for Beginners.
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