When I was 22, my requirements for a potential date were gainful employment, a nice car, and a place of his own; unless, of course, he had abs like Shemar Moore and was willing to spring for a bottle of my favorite wine at dinner.
At 28, I became a vegan –no dairy, no eggs and no meat – well, except for Fridays, Saturdays and a loved one’s birthday, in which case I could eat as many pieces of ice cream cake that my outfit would allow. Ten pounds later, I realized it was time to stop wavering and commit.
For the past few years, I’ve had the same New Year’s resolution: become better with money. Every year, I would save a couple extra thousand dollars here and there, but nothing substantial enough to put me on the path to financial freedom. After a particularly frustrating day at work, the kind where you end up in the bathroom stall doing the ugly cry, I decided that I didn’t want to be sixty or seventy still chained to a desk and dependent upon a paycheck.
As Thomas Jefferson alluded to centuries ago, if you want something you’ve never had, you have to do something different. In other words, in order to grow my net worth I had to change not only how I managed my money, but also my mindset.
Below are four steps, I took to start the process.
Step 1: Build a Money Mindset
There’s no shortage of personal finance books that explain the logistics of acquiring wealth — spend less than you earn, invest, build multiple streams of income — yet very few discuss the mindset of the financial elite. Oftentimes, we can seemingly take all the right actions and still find ourselves back at square one due to our limiting beliefs.
In the Power of Awareness, by Neville Goddard he writes, “By desiring to be other than what you are, you can create an ideal of what you want to be and assume that you are already that person. If this assumption is persisted in until it becomes your dominant feeling, the attainment of your ideal is inevitable.” In short, if you want to become financially successful, your mental concept must reflect that of a wealthy individual.
Ask yourself: If I was financially independent, how would I show up in the world? Would I repeatedly talk myself out of business ideas and settle for a job that doesn’t fulfill me or would I put some of those ideas into action? Would I blow my bonus on a handbag or pair of shoes or use that money to invest in the stock market or real estate?
Step 2: Track Your Money Flow
Like most things in life, if you don’t know where you’re headed you’re destined to remain in the same spot. Keeping detailed records of expenses, savings and investments will help you determine if your current lifestyle is moving you closer or away from your financial goals so you can make adjustments accordingly.
After repeatedly blowing my budget, I decided to purchase Quicken Premier edition, a money management software, which helps me not only keep tabs on my expenses and savings, but also provides a snapshot of my overall financial health, including my overall debt and net worth. There are also several free and low-cost options available to track your spending and savings priorities, including Mint.com, Expensify, YNAB and Shoeboxed.
Step 3: Gather Strength in Numbers through Accountability
The greatest lesson I’ve learned about the importance of accountability came from training for a half marathon. With the support and encouragement of a local running group I joined, I went from running 5 miles to completing a half marathon in 14 weeks. During times when I wanted to quit or skip out on a training session, knowing that I had a group training alongside me kept me going, which was the inspiration behind starting this blog. In addition to holding myself accountable by sharing my journey with others, I hope to also be a source of encouragement for other women.
Step 4: Boost Financial Literacy
According to Prudential’s 2014-2015 Research Study on Financial Experience & Behaviors among Women, 36% of women report they are not adequately prepared to make effective financial decisions due to a lack of knowledge. I’ve discovered that the best way to acquire financial knowledge is by reading. Billionaire and CEO of Berkshire Hathaway Warren Buffett admits to reading five to six hours a day. Mark Cuban, technology entrepreneur, owner of the Dallas Mavericks and an investor on ABC’s Shark Tank also states he’s an avid reader.
While I’ve read personal finance book classics like Think and Grow Rich by Napoleon Hill, The Richest Man in Babylon by George S. Clason, Rich Dad Poor Dad by Robert Kiyosaki, one of the most instrumental books that helped me get committed to this financial journey is Can’t Hurt Me by David Goggins. This book challenges you to chuck all your excuses, especially after reading about the childhood abuse Goggins endured and the mental tools he used to overcome insurmountable physical challenges as a Navy Seal and ultramarathoner.
For better or worse, we as women commit. Many of us tie ourselves to romantic partners and careers for years on end, yet play the field when it comes to financial matters. However, the financial decisions we make has the potential to not only shift our lives, but also the lives of those around us and generations to come, so choose wisely.