Updated: Sep 13
Financial freedom gives you options. So, what will you choose? Here are ten life lessons on money and creating the life you want. And that is where our lessons begin:
1. Be Crystal Clear About the Life You Want
Don't tell me what you value. Instead, show me how you spend your money, and it will reveal what's truly important to you. You can afford anything, but you can't afford everything.
You may say you can't afford to save, but at the same time, you're buying nice clothes and hitting the bars. There's nothing wrong with clothes and bars as a deliberate, conscious choice. But don't claim that bigger goals are out-of-reach.
Start You'llby knowing what is essential to you — hitting the bars or saving money. Is buying expensive clothes more important than traveling? There’s nothing wrong with buying a new car and enjoying a costly" meal.
The problem arises when you adopt habits that prevent you from achieving financial goals. " money frivolously while claiming that you “can’t afford” something else prevents you from achieving the life you want.
2. Focus on Solutions, Not Problems
The phrase “I can’t afford it is disempowering. Instead, replace that limiting belief by asking yourself, “How can I afford what truly matters to me?” Posing -open-ended questions cause a mental reflex, causing your subconscious mind to go in search of the answer.
Think of what you hope to achieve and pose a question to get your brain working. If you want a new home, ask, “how can I afford a new home?” Want more clients? Ask, “what would I need to do to attract more clients.”
Remember that words have power.
3. Money Buys Choices
Do you often say", "I don't need a lot of money” or “money doesn’t buy happiness?” These beliefs will work against you finding opportunities to create more wealth. Why would most people get up early and work eight hours every day, only to claim, “money doesn’t matter?” It does matter.
Money’s highest and best purpose isn’t to fill your life with expensive gadgets; it gives you options, opportunities, and greater freedom. Want to switch jobs? Let one parent stay at home? Move to the beach? You’ll need cash. You may not need millions to support the life you want, but you will need some money.
4. Money Buys Time
More valuable than the latest iPhone or Tessler vehicle is time. You can choose to spend your money however you’d like. But research shows that given cash, most people would spend it on buying the most precious asset: Time.
Time is limited; money is not. Use your money to buy time with the family and do what brings you joy.
5. Spend on What Enriches You or Makes You Rich
Society has expectations around how we should spend our money. Nobody questions the purchase if we spend $15,000 on a mid-size Toyota sedan. No one asks, “How could you afford it?”
But if we spend this same $15,000 on a scuba-diving trip in Fiji, people raise eyebrows. They assume we’re filthy rich, in credit card debt, or sponging off some sexy benefactor. Nobody seems satisfied with the honest answer, “I hustled hard and spent way less than I earned.”
If we buy a house for ourselves, nobody questions the purchase. No one says, “How amazing! You bought a two-bedroom fixer-upper starter home! You must be rich!” But if we buy an investment property, people raise eyebrows. “Where did you get that kind of money?”
We’re spending the same amount of money as our next-door neighbor, but we’re buying different things. They bought a boat, and we purchased investments. People will raise eyebrows, ask questions, and make assumptions. Be okay with that. You’re going against mediocrity.
If you spend the way that everyone else does, you’ll carry the same debts that they do. You’ll work until you’re 65, then look back and wonder, “Is this all there is?”
6. Increase Your Income
If you are saving as much as you can but still struggling, it may not be because you have a spending problem but because you are not earning enough.
Find ways to supplement your income. If you're earning $25,000 annually, find ways to increase it to $50,000. Life gets easier once you earn much more than you need to cover your basic expenses. How much you earn impacts how much you can save. Find ways to make more.
7. Automate Your Savings
Saving is what you do with extra disposable income. Save a portion of your income. If you are already doing this, increase the amount. The more you save, the more money you have.
The more money you save, the more choices you have. Automate your savings by automatically transferring a portion of your income to a savings account. It is that simple.
8. Start Investing
If you want your money to grow fast, start investing your savings. You've won the game when your investments more than cover your day-to-day living expenses. Financial freedom is achieved when the return on your investments is meeting all your needs without touching your principal. Then, your money is making its own money.
Investments will go up and down — that is what they do. Many people cash in when their assets go down in value. Or they stay in till it recovers and then sells it. To make money, invest when things are undervalued. And stay invested.
If you're hoping that a house or stock will rise in value in the next few years, you're speculating, not investing. Want to be an investor? Start with one hard truth, make your money going in, not coming out.
9. Start Now
Start this process now. Choose one action, however small, that you can do today. Great victories are the result of marginal gains accumulated over time. So start now. Call an advisor.
Open a savings account. Start an investment account. Look at your cash flow and decide how much you can afford to save. Then, look for additional work or a higher-paying job. Whatever it is, start now.
10. Create Multiple Sources of Passive Income
Passive income is income earned even while you sleep. It's getting to the point where your money is working for you and not you are working for your money.
It's not enough to create one source of passive income, such as dividend income from your investments. It would help make an income by creating an online business by selling an ebook, digital product, course, or app.
Money And Living The Life You Want
Most of us long to live life on our terms. Where we get to do what we want, when with want, and with whom. But often, not having enough money prevents us from achieving this and we don't know how to go about changing things.
Having money gives you financial independence. The ten life lessons above are a guide to help you achieve financial freedom. Once you reach financial independence, your options are endless. You get to decide if you want to work in a cubicle, serve clients or punch a time clock. Or, you can spend more time with family and friends and live the life you want! And wouldn't we all want that?
This article was written by Jennifer Thompson