Psychological Tricks to Fast Track Your Financial Success

Money is very much about psychology as what it is about numbers. A person’s attitudes and beliefs towards money can have a huge impact on your financial decisions and consequently the financial results of the decisions we make.

Here are some important mindset shifts that a person can adopt in order to improve their financial prospects.

It’s Not About Spending Less, It’s About Spending Well

The majority of people who love spending lots of money hate being told to spend less. This is despite all the financial advice telling them that it would be wise to start spending less.

This can be extremely difficult to come to terms with if you were raised by parents who couldn’t afford, or didn’t give you permission to spend money. You may have grown up waiting for the day you could spend your own money, only to be told by society that you’re being “irresponsible” if you spend it.

So instead of trying to spend less, you should aim to be more strategic and start spending better.  
Spending well means that you are clear on what your priorities are and you spend accordingly.
For example, if you imagine that every week you are given a limited supply of water and it has to last you an entire week, you are going to obviously prioritise how you spend that water. It’s important that you have drinking water. Does the car need a wash? That can probably wait.

When it comes to money, most people are unclear on their priorities so it just gets spent anywhere. When you are clear on your priorities, you can allocate spending towards things that are actually important to you.

You can also identify ‘low-value spending’ (things that don’t give you much value). It’s easier to eliminate low-value spending without feeling deprived because you won’t really miss it!
This mindset shift has transformed many of our students from ‘spenders’ into ‘savers’.

Earning Money Is Fantastic, Managing It Is Crucial

A lot of people have a belief that they shouldn’t care about their finances until they have money to care about. 

The reality is: "I’ll have money to care about when I start caring about my finances."
A common belief that many Australians have is: “I got a promotion, I was earning more money and I was still struggling.”

It’s easy to fall into the trap of thinking that if you just earned more money, it would solve all your money problems. Yes, earning more can definitely help, so if you can do it, you should definitely do it.

It is also important to make sure that you don’t put all your eggs in one basket because financial success requires two parts: earning money and managing it. Even if you earn a lot, if you never learn to manage it, it’s really hard to achieve financial security. A good example of this would be looking at the large number of lottery winners who eventually end up bankrupt.

The majority of our students who turn their financial life around, started doing so on the same income they had when they started with us.

Their income didn’t change, their ability to manage it did. So, start today with what you have.

Getting on Top of Your Finances Is Hard, Not Being on Top of Them Is Even Harder

It is so important to start doing things your future-self will be grateful for. For example; have you ever walked the long way around the office floor to avoid an awkward conversation? Or put up with a mild but persistent toothache to avoid going to the dentist?

Everyone has done it. You put up with what you feel is a ‘lesser’ pain to avoid a ‘bigger’ pain.
Humans will generally go to great lengths to avoid things we think are painful.

So, if you think fixing your finances seems painful, hard, complicated, guess what you’re going to avoid? Your finances.

I’ve noticed that many of our students who make real change do so because the pain of their current situation is greater than the pain of doing the work to fix it. They’ve got to the point of: “I’m not living like this anymore. I want better, and I’m willing to do what it takes to get there.”

See, there isn’t an ‘easy’ option. Facing your finances may not be ‘easy’ but is living with financial anxiety easy? Is putting up with the nagging voice of: “I should figure this out, I don’t understand what I’m doing, I feel so lost” easy?

Many people have ‘numbed’ themselves to the pain of their financial situation. It feels ‘easier’ to pretend it’s not that bad than to admit it’s not working, because that would be embarrassing and then we’d have to do the work of fixing it.

As hard as it may be, there’s enormous power in becoming fully present to how much financial discomfort you’re in because that ‘pain’ will drive you starting acting.

Once you decide to act, you shouldn’t be surprised if your life starts to change, especially for the better in the long run.