Whoa there Nellie!
Slow your roll just a little bit… at least until we get a few things situated first.
Trust me, I’m stoked that you’re so jazzed about mastering your money. I really am! Honestly, that excitement is could carry you a long way, provided you know how to use it.
Look, I definitely don’t want to rain on your parade, but it’s really important that you understand something before going any further. Like all sudden bursts of energy, this too will end. It’s unfortunate but it’s true.
But that doesn’t mean you should get down on yourself and just give up. Heck no! Instead, it’s super important to harness your energy while it lasts. Use it to create a big impact quickly! And if you’re going to do that, it’s imperative that you focus on the right things from the start.
“But, how do I know what the right things are?” you ask.
That’s what I’m here for! Let’s take a look at some areas where, if you focus your energy, you can make the biggest financial impact in a shortest amount of time.
What Changes Have the Biggest Impact?
I’m guessing you’re here because, at some point, you realized money was getting tight. Maybe this is a new discovery, or maybe you’ve known it has been a problem for a while.
Regardless, you decided to make a change, and I’m super proud of you for that. Just by making a decision, you’ve already come a lot further than most people. Great job!
Now, chances are also good that you’re probably thinking something like this: “If I could just earn more, all of my money problems would just go away.” I’m feeling pretty good about my guesses at this point, and I’m almost positive that I’m 2 for 2.
While I’d love to claim that I’m an all-knowing financial guru, the truth is that I’ve seen this before. Heck, I used to think the same thing.
I was wrong… and you are too.
The Extra Income Trap
“If only I could make more money…” “If I could just get that raise…” “Maybe, if I started a side job…”
When we’re struggling with money, this is almost always the first place we turn. Unfortunately, there is a giant flaw in our logic.
You see, money problems don’t discriminate by income (usually). They don’t.
Whether you make $40,000 a year or $250,000, at the end of the month, you might still find yourself barely scraping by. I know it’s true because, across all income brackets, I’ve seen it with my own eyes!
So, unless you’ve got a legitimate income crises, a situation where you truly don’t make enough to meet your basic needs, something else has to be going on. There must be something that most of us are still missing, right?
There is… and it’s usually this:
Before we can get ahead, we must learn to take care of the money we already have.
You don’t need a side hustle. What you need is a plan.
Taking Care of What You Have
Here’s the thing: If you don’t learn to take care of the money you already have, more money isn’t going to fix your problems. Sure, more income is nice, but it only gives you the opportunity to get ahead. It certainly doesn’t guarantee your success.
When you habitually live beyond your means, an extra $500, $1,000, or even $5,000 a year isn’t going to cure your money blues. Unless you fix your fundamental flaws, your bad habits, you’ll probably work even harder only to spend the extra – leaving you in the exact same position as you were before.
Don’t get me wrong, I love making extra money. I think having multiple streams of income is super important. I also believe that the way to get really stinking rich is to think big and find ways to increase your income.
But that comes later.
That’s a discussion we should have after you’ve learned how to handle the money that’s already in your pocket.
Besides, most people don’t really want to become filthy rich. They may like the idea of the freedom it provides, but what they really want – what they’re truly searching for – is to feel more comfortable in their own situation. To do that, all it takes is some simple money management skills that anybody can learn if they try!
The Wide-Ranging Impacts of Sound Money Management
When you learn to manage the money you already have, a few things happen:
- You see an almost immediate improvement in your situation.
- You build good habits that will last throughout your life, no matter how much you make.
- You realize you don’t need as much as you thought you did.
Seriously, that’s all it takes.
So, instead of chasing those never-ending income dreams, start from the beginning by learning to manage your money well instead. Here’s how.
4 Important Steps to Sound Money Management
1) Have a plan. – Don’t like the word budget? That’s fine. Call it a monthly money plan instead. Every month, use a pen and paper to determine how much money you have going out and coming in. It’s as simple as that. Learn how to create our favorite type of budget here.
2) Track what you spend. – With your plan in hand, track what it is you actually spend. Simply write down everything you spend, then compare it to your budget to see if you’re on track. You’ll get a crystal clear picture of where your money is going. Then, you can make any adjustments as needed.
3) Create an emergency fund. – This important part of the puzzle is definitely something you don’t want to skip. You can’t plan for everything, but that doesn’t mean an unexpected expense should throw you off-track. An emergency fund is like an insurance policy for your budget, and it’s best kept in a high interest savings account. When something comes up, simply use your eFund to handle the expense. Start by saving $1,000 and work up from there. Learn how to create your efund here.
4) Look for ways to earn more. – Once you’ve started taking care of the money you already have, NOW you should look for ways to ramp up your progress. That includes finding ways to make more money. Side jobs are great, but they should really be used as a way to boost the success you’re already having!
Look, you’ve already done the hard part. Making the decision – the real decision – to seize control of your money is by far the most difficult part of getting started. Now that you’ve truly made a commitment to getting ahead, focus that energy into doing the right things first.
By taking care of the money you already have, you’ll realize that you don’t need nearly as much as you thought you did. When you’re proactive and deliberate with how you handle your money, results come quickly.
You can do this. Stick with it, stay committed, and you’ll the simple skills you for financial wellness will become ingrained in you for rest of your life – no matter your income. Keep the first thing first, and everything else will start falling into place.