Do you want to change your money mindset? Do you just wish you could have a little more peace and a lot less worry? Here are 7 Simple Steps for Money Mindset Peace.
But first, let’s talk about how why we need peace. Sadly, disagreement about money in relationships is reported to be one of the top reasons for marital strife and even divorce. I can see why. It is among some of the biggest stressors for people. Even in one of the richest countries in the world, we still worry about getting everything paid, even the basic things sometimes. But with some simple steps, each of us can work to improve our money mindset and empower ourselves to gain freedom in the financial aspects of our lives.
I want to be clear. These actions are simple, not easy. Easy and simple are not necessarily the same thing.
We all know that to get in great shape, we eat healthy food in healthy portions, drink water, sleep, work on our brain, and work our muscles…a lot. See? Simple, but boy, oh boy, that is a lot of work – not easy.
Like most things, if it is worth having it is a lot of work to get it. So now that we have that straight, these steps are simple, but I don’t want to over-simplify the process, it will not be easy and it will take a lot of concerted effort.
We can do this!
Our Story
We sat down with an insurance agent to get a new policy on our one, shared family vehicle – a late-model mini-van that a few years before we paid $3,900 cash for. A few weeks prior, my husband lost his job. We lived, with our small children, in another state 751 miles away on a college campus where he worked, so we were essentially homeless now, too.
After the initial shock and natural hurt, we calmly decided to move close to family for the first time in our married life and start over in a new state.
The agent marveled at how calm and confident we were in the face of this. After the appointment, as we reflected on her reaction to us, this is what we declared as the cause.
First, we credited our solid faith in Jesus and how we rested on the peace that he is in ultimate control of our lives.
Then we said, “we are debt-free, we have a year’s worth of savings, we are in good health, we love each other, and we have a loving family excited to have us near. What else could you ask for?”
Because of Jesus and our financial situation, there was no need to panic or fear.
I want that kind of peace for everyone.
Managing money (or the lack thereof) is so stressful, so exhausting. Many of us are living one paycheck away from ruin. I don’t think that God intended for us to chase after money, but he does want us to have a full, abundant life as he said in John 10:10: “I have come that you may have life and have it to the full.” How we can make this possible?
7 Simple Steps to add Peace to your Money Mindset
1. Practice gratitude
Start with thanking God for all you have now. The root of joy is in gratitude. Though we are not living all of our dreams yet, our life might just be someone else’s dream. We have so much we must be thankful for. Start by counting your blessings. Focusing on our abundance and not lack, will set the tone to bring peace in our heart surrounding our financial journey and the stage we’re in right now.
2. Know Your (Net) Worth
Face your fears and find your financial net worth. What is net worth and why is it important? Net worth is the outcome of our daily money habits for a specific moment in time. It is a snapshot of your financial position, which is how much you have minus what you owe to others. It’s a powerful number to know because one could own a lot of stuff, but if he’s up to his gills in debt, it owns him.
There are many ways to do this, but the simplest way to decide one’s net worth is to gather statements of accounts and other asset values and write them down.
- In the first column, write the debts from smallest to largest – everything you owe (don’t forget to include personal debts like money borrowed from your Dad).
- In the second column, write your assets (savings accounts, current value of your home and vehicles, for example).
- Total each column. Subtract the debts from the assets. That is your net worth. Yes, it could be a negative number and that is OK! This gives you a starting point.
If you have never done this before it can be a powerful and eye-opening experience. It can feel like we have a lot, but when we compare that to our liabilities or debts, it offers a more realistic picture.
3. Dream Big
This is the fun step! Take some time to dream about your biggest goals.
To get you started:
- How do you want to feel about your money?
- What would you give away and to whom if you had it to give?
- What would you do for your kids if you had the money to do it?
- How would your legacy change if your money situation changed?
- What opportunities could you or your family enjoy that are not available to you now?
- Would you travel? Send your kids to a great school?
- Would you change careers? Move?
- Would you get the large popcorn at the movies or the extra guacamole at chipotle?
Dream big, my friend!
4. Set Goals
You have your big dreams, now give them substant by transforming them to goals. Write out a clear description of what your destination is. If you are married, talk about your dreams and goals together.
Set SMART goals. SMART is Specific, Measurable, Attainable, Relevant, and Timely. Clarity is vital for focus. Without a specific goal, it is easy to think we have done ‘enough’ or like we’ll never get “there”. If you aren’t working toward something, it’s easy to lose your way.
This can be fun, but it will take some work. It is easy to say “we want to be debt-free”. OK, great goal, but let’s get a little more specific. For this example, debts will come first. How long will it take? Are you going to consider your home mortgage in the debt?
The point is to get specific, and hyper-focused on the exact goal this will help with your next step, which is mapping out a strategy.
5. Make a plan!
Next step, line out your attack – HOW you will reach your dreams and goals. Write it down! There are so many ways!
Dave Ramsey, a popular personality in the personal finance industry, offers his wealth-building plan with his 7 Baby Steps. Dave Ramsey’s book Total Money Makeover is life-changing for so many.
Larry Burkett is another excellent resource for helping you make a plan for bossing your money around. For decades, Larry Burkett has been educating families in money matters.
Find a plan that works for YOU. You must do what is right for (both of) you. If it is not a plan you will follow, it is not sustainable. But remember, if you do what you always did, you’ll get what you always got. If you want to change, you will need a new plan.
6. Take Consistent Action
This is the most obvious, but the hardest step. It is not revolutionary or fancy, it is one foot in front of the other, every day. Do the work and get the results. Remember the long-game and the reasons for the journey. Just like healthy living or building a business, consistency is key. If you make a mistake, learn from it and keep moving forward.
You will be on this step the longest. Every day, you will do step 6. Every few months, or whatever schedule you set, you will skip over to the other steps for an hour or so, but then you will hop right back here to good ‘ole steps 6, Take Consistent Action. So welcome, make yourself at home. You need to get familiar with Mr. Six.
7. Assess Regularly
Now that you have your plan and actions going, schedule a time to give it a review. This is the action step in with many of us drop the ball. You must set appointments to revisit your goals, plans, and actions steps, and make adjustments, as needed. This will help keep your money mindset healthy and strong. When you sit down to review, look at these things:
- Update your net worth calculations. This number is will change constantly. It can be so motivating (and a great reality check) to see this number grow!
- Adjust the action plan. You can’t change what you can’t see. If we get off track, if we are reassessing, we can adjust our course and keep going toward our goal.
Now, hear me, if you get off track, don’t quit! Adjust the plan and keep going.
If a plane gets off course because of wind or some other reason, do they land right there or go back? Of course not, they recalculate the flight plan and keep soaring toward the destination. That is what you will do, too. The plane might have to arrive later or fly faster to get there, but adjustments will make it work.
- As you go, you may discover that there may be are expenses that you can cut from your budget that you did not see when you started. Cut them.
- Maybe there will be an opportunity to earn a little more to increase the momentum. Seize it!
As you move forward, keep looking for opportunities for improvement and you are much more likely to find them – because you are looking – because you have focus.
Sweet Peace
These are YOUR 7 Simple Steps for Money Mindset Peace. Peace is really what we want, right? Think about it. We want to know – even though we don’t want to know – about our financial situation. We can try to ignore our lives, but it is there, nagging in the back of our mind sapping our energy and confidence and vitality. It doesn’t work.
We must live our lives face forward and with integrity. If you are pretending everything is fine when things are not fine or you simply don’t even know, you are lying to yourself and that lacks integrity. No one can live in peace who is living a lie. We just want peace to rest in knowing that we are doing our best.
Remember, I said these actions were simple, not easy. Simple and easy are not the same thing. Having patience with a child is simple, but is it easy? Not always. See my point?
I am not insinuating that these 7 simple steps for peace in your money mindset are not going to take a lot of hard work. Oh, each step with take deep work and soul-searching strength, but the steps truly are simple.
What about you?
In parting, where is your money mindset? Do you have peace? Do you use any of these actions in your financial hygiene routine? Let me know where you are and as always, I love your questions and comments.
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