Have you ever asked yourself, no matter how you manage your expenses, you are still stuck in a loophole of living paycheck to paycheck? Well, you are not alone.
Based on research, the majority of U.S. consumers, or about 54 percent (125 million U.S. adults) of consumers, live paycheck-to-paycheck as of June 2021.
Financial well-being is more than how we handle money. It is also about identifying patterns, relationships, and mental scripts with money. As defined by T. Harv Eker in his best-selling financial book, Secrets of Millionaire Mind, a money blueprint is defined as how you have been programmed to respond to money and wealth.
But how is this related to our paycheck loophole? Sadly, the negative beliefs that we adapted subconsciously from our parents when we were young or from the environment we grew in shaped our current money beliefs. Our negative viewpoint on money sabotages our current financial well-being.
Rewire Your Brain to Break Bad Habits and Develop New Ones
Sitting down and uncovering your feelings and behavior about your finances is the first step. Ask yourself reflective questions like what are my negative beliefs about money? How do your parents talk about money? What does society say about money?
Take your time to observe your thoughts. The more you are aware of your bad financial habits, the more you will understand that the projection of your negative belief is not you. Acknowledge, unlearn, and change it with healthy money affirmations like money is unlimited, money is easy to earn, and I am a money magnet. The more we practice a healthy money mindset, the more we attract money.
Learn to list down your finances and figure out how to make them better. Do a budget and think of what expenses you can reduce to instill good habits.
Wealth Is the Result of Your Habits
Tracking your expenses is one of the best ways to see where you are standing at the moment. It helps you to make a decision based on your current financial status.
Usually, we spend our income money using the equation: income minus expenses equals savings. However, this is not recommended as you will most likely save what will be left in your income.
According to Robert Kiyosaki, author of the bestselling finance book Rich Dad Poor Dad, you have to make a habit of paying yourself first. His equation simply puts income minus savings (20%) equals expenses. This strategy will help you consistently build your savings and investment fund.
To boost your strategy, financial planners recommend the simple habit of bucketing system. In this method, you put 50% of your income into your needs bucket, allocate 30% to your wants bucket, and 20% to your savings bucket. You can also play the percentages and adjust them based on your preference and goals. You can have a savings provision for your future while feeling free to purchase what you want through the bucketing system.
Define Your Goals and Plan Them
Simply setting a goal is not enough to achieve financial freedom. A quote from Benjamin Franklin states, ‘’If you fail to plan, you plan to fail.’’
Most people are unaware of what they want, and that is why they never get rich. Planning and making sure that your goal is clear will be essential as it gives you a clear direction to financial freedom. For any goal, you should follow the S.M.A.R.T method, which stands for Specific, Measurable, Attainable, Relevant, and Time-bound.
For example, you plan to build a laser etching machine, which means you will need to identify your business capital and the cost of putting up a business. Perhaps, you have to invest in a quality etching machine according to your business capital budget. Finally, identify the revenue, your return of investment, and your target date.
The Best Investment That You Will Make Is Within Yourself
You are your greatest asset. Success attracts people who are ready to receive success. Before you jump into money investments, you can build and copy the habits of successful people.
Invest in your learning, upgrade your mindset and continuously sharpen your skills. Be ready to do the uncomfortable and take necessary actions to make your goals happen. No matter how much you learn, you will stay the same without taking action. Talk is cheap, and actions are the new trend. Outgrow yourself so that you are ready to receive it when abundance offers itself.
Getting rich and staying rich is not the end goal. Many people stay where they are because they have been programmed with the wrong blueprint. Fortunately, you have a choice to choose a grand blueprint and share it with others constantly. By developing yourself, you take others with you since wealthy people have the responsibility to help others.