Change your Thinking about Money

I have found that many who seem to have troubles with money have some misguided beliefs about money. And as a person who was not always money-conscious myself, but trained myself to become so, I have found that if you change the way you think about money, you can not only eliminate your money troubles, but you can actually attract financial success.

The primary problem I find among my clients is that they are not skilled at managing money. Credit cards are not evil as long as you use them properly. Too many people think of credit cards as money in the bank. Credit cards should be thought of as debits against your bank account just as writing out a check would be. Fresh out of college, I found myself in a bit of credit card trouble. My problem was that I thought as soon as I graduated, I'd be making lots of money and would have no problem paying off my credit card debts. I found out the hard way that that was not the case. I ended up getting myself into more trouble by signing up with a credit counseling agency that was not legitimate. All I ended up with were bigger bills and bad credit. So before you sign up with a credit counseling agency, be sure to do your research.

I got through that, and thankfully learned my lesson. I now only use credit cards when I have the ability to pay the bill in full each month. There's nothing I hate worse than losing money, and in my opinion, paying 20% interest is losing money! It's sometimes difficult for younger folks to get a handle on their finances once they are on thier own and paying thier own bills. Think about it, when you lived at home in high school and had a part-time job, every paycheck was like playday! You probably had minimal financial obligations so most of your paycheck was for your amusement. What a shock to enter the real world and find out that most of your check goes to paying bills. What's the point of all this working, just to be able to pay your bills?

It's very, very important to keep a running check register. I know a friend who does not, believe it or not, use a check register. She calls her bank to find out what her balance is, and whatever they say at that time is how much money she thinks she has. This same friend has probably overdrawn her checking account seven times in the past few months. Then she has to pay overdraft fees and returned check fees that end up costing her hundreds more dollars. This could all be avoided by keeping her own log of her checking account balance, because checks do not clear right away with our bank and sometimes our bank says we have more money because they don't know that you just wrote out a check for $200.

Each time I get paid, the first thing I do is sit down and pay all my bills. I then subtract my bi-weekly allowance for gas and groceries, and then anything left over is my "fun-money". Since I already know what I will spend on gas and groceries and have already allocated for this amount, I run no risk of running out of money three days before I get paid again. Part of my "bills" includes a standard amount that I put into my savings account each time I get paid. That comes out first, before anything else, and it goes into a separate account so it does not show in my balance.

Just because you have an extra few hundred dollars each month, does not mean that you need to go and make a large purchase for another loan payment to take care of that money. Many people constantly live on the brink, buying enough so that their monthly bills are equal to or slightly greater than their monthly income. Just because you have $200 each month does NOT necessarily mean you can afford a $200 a month loan payment! Think about what it is that you really need. And live with that. If you have extra money, put it in the bank, pretend it's a loan payment, and keep on saving. You will save enough money to buy that special item that you want but don't need in far less time than it will take you to pay off that loan you thought you should take out to buy it now. And who knows, by the time you save up enough money, you very well may have decided you don't want that item after all.

It only takes a few small changes in the way we think about money to make a big difference in our financial situation. I don't feel as though I've sacrificed and lived meagerly to get to where I am, but I did change the way I did a few things. It won't happen overnight, but try one small step at a time and you'll be amazed at the difference it will make.