Everyone wants to be rich and be successful. Some people gravitate towards building a business, getting promoted at work or even wishful thinking of winning a lotto ticket.
We have marketing strategies for business, working overtime at a corporate job or going to our local newsagent to buy a lotto ticket to justify our goal in getting rich.
But funnily enough, the one subject we generally avoid talking about is money.
How do we control our finances to get financially stable?
After reading different perspectives on money, I realised how important it is to find a distinction between three phases of financial wellness before finding a strategy.
There is a financial perception of point A to point B mentality which is not true. And I don’t want to be a preacher in this subject but i do want to share what i have learnt.
Because ones perception of value isn’t the same as another persons’ perception of value. Or waiting for Prince Charming or an angel investor or winnings on a lotto ticket is not a financial plan.
There are three stages of financial wellness:
The first category of financial resiliency where people are surviving pay check to pay check are most people. In the United States, more than half of the population is surviving pay check to pay check and debt is a common existence in any persons financial position.
The first category of people are those who have the income but don’t control their finances by watching their expenses can lead to financial anxiety. Over time, more debt is accumulated and more interest is charged on their credit card or loan. Though, conscious spending and paying off debt can potentially save thousands dollars of interest and shave off years of debt.
The second category of people who are struggling are keeping their head above water and paying minimum payments of debt and bills. There are thousands of people in the same position but many people tend to believe they are the only one in this position.
There are always other options to downgrade or cut down on expenses. It could mean finding better deals with your bills, cutting down on take-outs and entertainment or even refinancing your debt to pay a lower interest rate. The most important belief to hold in your mind is that if there is a will there is a way.
The second stage of financial wellness is financial stability where are you are paying more than required on your debt, securing savings and satisfied with your current lifestyle. There is a healthy reduction in your debt and saving for yourself or your family will give the sense of financial security for the future. Bills and expenses are kept in check and generally your entertainment or holiday tab is keeping you satisfied.
The third stage is financial wellness: that is the Point B of the financial scale where you have hit your financial goals. Credit card debt is generally non-existent and healthy doses of funds are going into your savings or your home loan. Bills are systematic and expenses including entertainment, food and holidays brings us the most value and joy.
This stage doesn’t necessarily mean money is no object. It means we are generally meeting our financial goals. While there are people living the ultimate lifestyle - the one percenters - most people hitting this sweet spot are not just throwing their money away with every whim. There are still limits.
History shows successful business people and high profile celebrities are still at risk of financial strife when their expenses exceed their income. Walt Disney, J.K Rowling and Steve Jobs have at one stage struggled with finances in their lifetime and it certainly won’t be the last of highly successful people to succumb to finances.
So what does this have to do with your body and mind?
Well, the average person worries about money and ultimately it can take over peoples’ thoughts. It disempowers people about how they see their future. And I have to admit I have been there.
And yes, it is abstract.
But when money problems are stopping us from being who we really are, we need to look at our finances with a magnifying glass.
Unf*ck you finances: Melissa Browne
Think and Grow Rich: Napoleon Hill
Rich Dad Poor Dad: Robert Kiyosaki