Financial Literacy is what brings you Economic Security
Working for the dream
Practical financial knowledge for you as an individual enables you to gain financial literacy and that is what, in turn, brings about economic security.
We all want freedom. Freedom to choose. It’s time you stop putting your head in the sand and telling yourself that you just need to focus on sales, or worse still that “numbers just aren’t your thing”
I can give you the capacity to make better decisions for yourself so that you plan for the future. This is about protecting and supporting yourself and your dependents regardless of whether you are the sole income provider or not. I also want to encourage you to thrive throughout your life regardless of the economy or your familial circumstances. When you have the information you need, you can take personal responsibility, and I’ve got to tell you, it is liberating.
So what do you need to start?
I know that not knowing where to start is the number 1 reason that holds people back from even looking at their numbers.
Do you know what number 2 is? It’s the fear of seeing what you already know. Maybe you are living beyond your means or you really aren’t making as much money as you think because you are not operating for a profit. There are always hidden expenses and if you don’t consciously know what they all are, you are making decisions that are not serving you.
STEP ONE is acknowledging where you are at.
STEP TWO is choosing to better understand.
STEP THREE ask for help and start today.
You cannot begin to plan your future and know what you will need if you don’t start looking at what you are spending right now. The same applies to business. If you’re not looking at your overheads and the anticipated costs as you look to grow (or to even look at where you are today) you are making poor decisions that will potentially cost you money, or worse still, force you to go back and start all over again.
Money Mindset – Money is energy.
Your money mindset is all the beliefs, thoughts, and feelings you have about money. Like your mindset about any topic, it can help or hinder your progress toward what you want to achieve. Every day, YOU have the power to choose these beliefs. Sure, you might have some subconscious patterns that kick in around financial decisions but, raising your awareness about these things will help you uncover and alter them. Even if you know all the great principles for a positive money mindset, they won’t make any difference to your life if you don’t believe they are possible for you.
Perhaps thinking of money as energy will reframe your mind. To get what we want, we trade our money (which took our energy to create or store “savings”) for the value of something. The value you give to both money and to yourself forms the greatest part of your money mindset. This is usually reinforced by family, cultural, and societal influences, so it can sometimes be hard to untangle the parts that are holding you back.
How money can work for you
Money is a tool, it helps you get things done. When you improve your financial literacy, you gain a better understanding of how to use the money you currently have in the most effective ways and of what you need to do to improve your overall position. When optimised in the right kinds of accounts or spent on the right kind of assets, you can leverage the energy of money in your own favour.
You might have opportunities that are currently in front of you that provide you with ways of increasing your income, reducing your debt, or lowering your overheads. However, if you don’t know the best way to use the resources you have (or worse still, don’t fully understand the position you are actually in) you will rarely find money working for you. More so, it may even seem like it’s working against you!
Role of simple financial management
This is where learning a few simple things can make all the difference.
When you take control of your finances and learn to use an appropriate money management system, you then have the opportunity to direct your financial security, stability, and future. You will no longer be at the mercy of it. We’ll get into the details of this next but essentially, having a system to defer to can really help remove some of the stumbling blocks that often mess us up when trying to commit to a positive relationship with our finances.
You see, it is quite often our emotions that have us making decisions and they are rarely financially sound. Sales, in particular, are “FOMO” based; encouraging us to spend more than we earn, to buy in quantities that aren’t necessary, or to choose a lesser quality for instant gratification.
How financially successful people act
Financially successful people do a few things that might be different from what you are doing at the moment but don't think this is “only for the wealthy". In general, what these people do are simple things that, when done consistently, create a large impact.
They spend less than they earn - They build savings.
They use their money (and their knowledge about their relationship with it) in life-enhancing ways that work towards goals they want to achieve.
They educate themselves about their position and learn what they need to know when important decisions are necessary.
They prepare for unforeseen circumstances and have an emergency fund or buffer.
Having enough money to be able to consciously choose where to spend it gives you a lot of control over who or what you support.
Budget: The importance of understanding financial circumstances
It seems some people are put off by the term “finance “because they believe it to require a whole raft of specific skills that they don’t have. You might have been told or even believe that “you’re not good with numbers” or you “never really got the hang of mental arithmetic", so you can’t possibly make a budget.
The reality is that none of that is relevant when you are shown how! In its most basic form, where we all need to start, it’s really just about what money is coming in and what money is going out. Then you add what changes you want to make to grow.
Often people don’t make a budget because they think it will be difficult or terribly time-consuming to get the information together. However, as I mentioned earlier what is more often the case is that they know that if they really get down to the nitty-gritty, it will be unavoidable to recognise that they are spending more than they are earning and that they have spending habits that aren’t sustainable; that they could be putting their money toward more enjoyable or life-enhancing things, or they actually have the capacity to help others.
There might be some uncomfortable truths that are unearthed when you make a budget, but like anything in life worth pursuing, if you approach it with curiosity rather than judgment, you will quickly see where you can make changes that will serve you long into the future.
So, where to start?
Often, starting is the hardest thing. Here are a few things you can do.
Make a list of all your income and expenses and put all the information together.
Go through your statements to find everything.
Make a note of every time you spend some cash.
Categorise your spending — make broad categories, such as rent, utilities, groceries, entertainment, education, motor vehicle expenses etc. and see where most of your money goes
Get into the habit of knowing how much money you have in any one location (general accounts, savings account, your wallet/purse, your car, your safe etc).
Set your goals and look at your vision board so you are encouraged to find every last area you are spending money.
Remember: discipline is freedom. Have the discipline to work out what your financial position is and you will have the freedom to make the spending and saving.
If you want support to get this started and to set it up so that you are planning ahead, it’s time to prioritise your money by investing in getting this done now!