Small Steps You Can Take to Change Your Money Mindset, Panel Discussion | David T.S. Wood

Jul 27, 2020

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When it comes to your money mindset, what motivates you to save or spend? If you don't know the reasons behind your action, it can be hard to rewrite your story to achieve the life you want! Luckily, in this episode of My Extra Mile, David T. S. Wood discusses this topic with a panel of money experts as they share simple steps you can take today to change your money mindset.

Changing from a spender to a saver starts with knowing where your money goes as you earn it and only spending on what you can afford as often as possible. If you want to find your money mindset, this episode is a must-hear!

You will want to hear this episode if you are interested in...

Paying yourself and learning how to save
Setting aside money for your future
Finding balance in your life
Understanding where your money goes every month
Planning and spending consciously
Learning how to live within your means
What "fear of missing out" is and how to avoid it
Creating a realistic budget

How to change your money mindset

Do you pay yourself first? Each time you earn money in your job or side hustle, you need to start setting aside some money to pay yourself! An excellent place to start is 10% of each paycheck going into your pocket and 20% for your savings or retirement. By immediately taking these funds out, you will begin to build a future for yourself.

You won't notice the savings right away, but as you consistently take an increment off your paycheck and pop it into your savings, or "set it and forget it" you will start to see a real change. It's essential to find a balance, though.

Find ways to consciously spend on things that matter and save for your big goals. Read and study money masters to learn how to manage your money effectively. Learn what compound interest is, where to put your money so it works for you, and spending and saving with purpose.

Saving, spending, and everything in between

Did you know that the average person in the US has less than $400 in savings? When you live outside of your means, you won't be able to navigate trying times by having money in savings to help you come out ahead. These are the cases when people in need stack on additional debt by borrowing, compounding, and exacerbating an already problematic financial situation.

Additionally, before you purchase things with credit and build more debt, save instead so you can try to purchase it outright. Live within your means, and don't buy things emotionally. Don't buy a car you can't afford, don't buy a house and get wrapped up in a mortgage for more house than you need. Wait to buy until you can afford it or until you're ready to commit to the long-term purchase.

What's the priority for what you're buying in your life? Are you buying it because you want it or because marketing tells you you need it to live a good life? Do you feel like you buy things based on a "fear of missing out" (also known as FOMO)? It's crucial to understand your payments and earnings and how they play together in your financial future.

Building a budget that works

Do you know how to start a realistic budget that will bring results? You have to create a budget that works for everyone's financial goals in your household by taking everyone's expenses and goals into consideration. Find an amount that includes paying yourself first and paying into your savings and paying off any debts or investments. If you don't have any debt, consider saving ahead of time so you can pay it off more quickly, like your own line of credit.

If you feel like you have too much month left at the end of your money, you need to change your money mindset. By rewriting your mindset, you can go from a full-time spender to an efficient saver. If you need more support, read books written by financial experts, find a money mentor, and learn how to be more comfortable talking to people about money!