Finance By Design: Change Your Mindset, Change Your Life


Hey Readers!

Today I want to start another series of discussion that revolves around everyone’s favorite topic: finance.

Now, I know that word can be very scary. Some of you probably had some heart palpitations and broke out into a sweat just from me saying it. That’s exactly why we need to talk about it.

I used to HATE financial math. I thought it was the most confusing stuff in the world, and I’ve taken quite a bit of calculus. It wasn’t until I took a financial management course for my degree that I started realizing that I loved finance.

Yes, the math can be very involved, but once you get the hang of it, it’s smooth sailing. And the great thing is that there are plenty of tools floating around the internet that will do the math for you!

But I don’t want to just talk about the math involved (we’ll get to that later). That’s just my example of why I didn’t like finance.

I know a lot of people my age who are just flat out irresponsible with their money. Hell, I know even more people close to retirement age that are just as irresponsible!

Their issues don’t have anything to do with how much money they make or how many dependents they may have. There are plenty of blog articles written by families with very little money who make it work and still manage to pay down debt and build up their savings.

So if they can do it, why can’t we all?

The problem is that very few people approach money with the right mindset. Unfortunately, humans tend to be prone to liking instant gratification.

We’re impatient creatures, who want what we want as soon as we want it. Even if we can’t afford it.

We say to ourselves:

“I’ll just put it on my credit card and pay it off my next paycheck!”

Trust me, I’m just as guilty of it. It takes a very strong person to use credit cards wisely and efficiently.

But when we start doing that every day, for every single thing we want, we end up wondering how in the hell our balance got to be so high when the statement comes.

Thus starts the cycle of making payments and racking up interest costs.

Furthermore, we think that budgets are the enemy.

“They’re just out to get us and restrict us from having fun!”

Except…we’re the ones that make the budget.

I like to think of my budget as a guideline, a set of goals. Keyword here: realistic.

Trying to budget yourself into saving more money by restricting discretionary items like going to the movies or eating out doesn’t work.

Eventually, you get frustrated, and you end up binge spending. Happens to the best of us.

So what happens when we charge everything to credit and treat our budget like it doesn’t exist? We end up with a national average of consumer debt of $16,000 per household.

We’ve gotta stop thinking that we can just pay everything off later. Sure, in theory, that’s a great plan. You get the brand spanking new 4K UHD Smart TV right away, and you say you’ll pay it off in 3 months.

But then your car breaks down and costs you $500 to fix, so you charge that.

And then your kids (whether human or of the furry variety) get sick and that runs you $150.

You get the picture.

A lot of people are so bogged down in debt that they can’t even fathom a way out, and so they just keep adding it on in an attempt to cope with the problem. When in reality, there is a way out.

It requires a lot of hard work and willpower, but it can be done.

Now don’t get me wrong: credit can be great! IF you use it properly. That’s a big if.

So. A change in mindset. We’ve got to stop looking at money as this thing to be feared, as this monster that would be vanquished if only we made more of it. (Which makes absolutely no sense, if you think about it.)

Instead, think of money as a tool. A tool to dig yourself out of debt with. A tool to build up a house down payment with.

A tool to create your freedom with.

I’m not saying it’s easy. Far from it.

But if you start looking at money as a useful tool, and think long and hard about whether or not that new TV is really worth the time it takes you to earn its cost, your financial situation will improve.

– Rachel

“My favorite things in life don’t cost any money. It’s really clear that the most precious resource we all have is time.”

– Steve Jobs

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