5 Signs you dont control your money it controls you

by Mike on June 11, 2013

control your money

Taking control of your money can be one of the most important lessons in life for every teenager and young adult but the assumption is that we all learn this lesson, move forward and never make the mistake of letting our money control us. But do you really know which column you fall into here or have even considered it?

Are you in control of your money?

I have always felt that you really can reflect on your financial maturity or even demonstrate where you are on your financial journey by how you regard money and whether you can make it work for you. Some of the signs your not following this path and you are not in control of your money can include;

  • Are your thoughts constantly on money and how much you do or don’t have?
  • Do you spend money you don’t have? How does that credit card debt look?
  • Are you living from paycheck to paycheck?
  • Are your thoughts of money more about “lack of” rather than what you can achieve with it.
  • You cant remember the last time you actually invested or saved money!

Any of these things represent you? (Like they did me) then chances are your money is in control and your financial smarts needs a boost. All is not lost read on!

 

Take control of your moneyTake control of your money is the first step

Alex Tarquino at The New York Times back in 2008 wrote “First, Self-Control. Then, Debt Control.” and it sums up the first step I believe everyone needs to identify to take control of your money.

I know its such a broad statement just to whip out the words “self control” but have you considered how easy it can be to change your thought process simply by making your subconscious aware of it. I wrote previously about  Abundant vs Frugal mindset in an effort to challenge the thought patterns of both myself and my readers about how I spent money. The self reflection this gave made me shake my head about spending $18 on 2 drinks when out eating dinner but shirking away from spending $14 for six when I am visiting friends. The value I was placing on what I could achieve with my money was skewed!

But at the time I was working on auto pilot for many of the decisions I made which therefore affected my discipline and money decisions I made. Thus I wasn’t in control nor using my financial smarts! (your not guilty of this are you?) By the same token discipline with your money is focusing on spending which achieves positive results for you not negative ones.

Control of your money to achieve positive results you ask? Should be an easy one for you by asking yourself before making some of those spending decisions;

  • Does your spending result in a return on investment or is it simply disappearing?
  • Is the money being spent wisely or poorly on short term emotional gratification?
  • Could the money be better spent improving an aspect of your life permanently?
  • Have you considered investing you money on something that may offer a regular long or short term return?

See now we are thinking about our money as a tool to leverage effective returns rather than money as a currency we swap for short term good times. Don’t get me wrong I like a good time as much as the next person but balancing discipline with being conscious of your decisions is the key here.

Make a commitment to your financial smarts

In 1973 Henry Kissinger wrote;

“Who controls the food supply controls the people; who controls the energy can control the whole continents; who controls the money can control the world.”

To me this is some of the wisest words I could find about the world economy and on a smaller scale how you control your money personally. About how you consider your money and what you can achieve with it.

Here is a tip I learned from one of my mentors;

Financial SmartsTake some of your money and perhaps create a wealth fund. Whats a wealth fund you ask? As simple as it can be;

Take 10% of your income every week and automatically divert it into a bank/savings account you cant access easily or on the spur of the moment. By committing the money to here your making sure you have savings and funds to invest at a time when you wish to. Your not going to break into it simply to spend a night out or buy a luxury item. And the compound interest of money going into that account every week can make a tidy nest egg in a month or two. You may not invest this wisely once you make a decision but at least you have the funds there to invest! You make the decision to take control of your money not let it influence you.

The lesson above creates a very subtle distinction but one that can affect your financial journey, financial smarts and ultimate quality of life.

 

 

If you like my writing today don’t forget to share with others who may need the hint!

 

 

***photos thanks to Serge Melki, dno1967b,***

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