What if I told you that finances would never stop you from getting anything you wanted?
Okay, what if I said there actually is a tried and true way to save more money. Does this sound too good to be true? I promise it’s not! In fact, by changing just one simple thing in my life, I’ve figured out the #1 way to save money.
The thing is, I’ve learned a lot of secrets about money over the last few years while my husband and I have paid off over $200,000 in student loan debt, invested in real estate, and built up my family’s savings. But the single most important thing I have learned, and consequently, the #1 way to save money is simply this– you have to change your money mindset.
So what does that actually mean?
It means you have to change the way you view and use money if you really want to save money. Your money mindset is your thoughts and beliefs surrounding money and finances, some of which are deeply rooted, and are largely based on your life experiences. The real secret to saving money is to change your money mindset. That might sound nice and all… but how you go about changing your money mindset? It’s actually a lot easier than it sounds. Here are 7 steps you can start implementing today to change your money mindset so you can save even more money.
7 steps to change your money mindset to save even more money.
1. Be thankful for what you have.
The first thing you should do to change your money mindset is to take time every day to be thankful for what you already have. That might sound silly, but it’s not. Research shows that people who have an attitude of gratitude are more patient and willing to hold out for bigger financial gains. In other words, they are making and saving more money. So, if you want to really incorporate the #1 way to save money and change your money mindset, start by being thankful for what you have. This is the first thing I do in the morning—I either think through or write down several things I’m grateful for. Not only does it help me have the right money mindset, but it also helps me start out the day on a positive note and makes me a better wife, mom, friend, employee, and whatever other role I play throughout my day.
2. Find your why.
Another useful step to help you change your money mindset so you can save more is to find your “why.” Why do you want to save money in the first place? Do you want to have a feeling of security in case of a rainy day/week/month/year? Do you want to save up to buy your dream house? Are you saving up for a dream vacation? To have a baby? Whatever the reason, make sure you have a clear “why.” Take time to write down your reasons for wanting to save money. This will help to seal those reasons in your mind and will give you something to look back on during times where you’ll need a reminder of your new money mindset. My “why” came when I got pregnant with my son. I was in my last year of law school and my husband and I hadn’t given my student loans a second thought during school. Suddenly, with a new baby in tow, the weight of our six figure student loans felt absolutely crushing. (You can read more about paying off our six figure student loans here). I knew I wanted to provide my son with stability and that I absolutely had to figure out our finances, pay off our student loans, and start saving so that we could give him a stable life.
3. Define what matters.
In addition to discovering your “why,” take time to define what things matter to you most and what things do not. This will help you discern smart purchases from poor purchases, enabling you to save money. Is it important to you to go out to lunch every day? Or is it more important to you to save for your dream house? Write it out and define what is important to you with no judgments on yourself. This simple act will help you discern what is important to you and enable you to change your money mindset.
4. Create a happy budget.
Another important step to change your money mindset is to create a happy budget. A happy budget is a budget that works for you, instead of you working for it. What I mean is, a happy budget is a budget that is easy for you to follow. For some people, that might mean organizing exactly where you want every penny to go in an Excel sheet and sticking to it religiously. For non-Excel sheet people like me, it might be something as simple as giving yourself an amount of money to spend each month and put the rest to savings. For example, in my personal budget, our family has a goal of spending $3000 or less per month on all of our spending besides student loan payments and savings. Anything we earn above $3000 goes to savings and student loans, which we pay first. One of the most efficient ways to save money is to have a plan for your money and to dictate where your money is going. I know the thought of a budget makes a lot of people shut down (I used to be one of them!), but it is vital in changing your money mindset—pick a happy budget that is easy to follow.
5. Pay yourself first.
Paying yourself first is also vital to changing your money mindset to help you save money. The reason for doing this is simple. If you wait to pay yourself until after all of your other expenses at the end of the month, you’ll find that you don’t have much left to save. When you prioritize this payment to yourself, you’ll naturally adjust your spending to accommodate your savings, rather than the other way around. It’s up to you how you do this, but the most common way is to save 10-20% of your income. Pay yourself immediately when your paycheck comes, that way you never miss the money. If you can automate your payment to your savings, do so. If you really want to change your money mindset, pay yourself first.
6. Make decisions out of confidence, not fear.
Another important way to change your money mindset is to start making financial decisions from a place of confidence rather than fear. For example, instead of deciding to save money because you are terrified that money is scarce and you won’t be able to earn enough to save again, save money from a place of confidence, knowing that there is more where that came from. Honestly, you will probably have to fake it until you make it here, but the more you practice confidence about money, the easier it will come. And being brave when it comes to the choices you make with your finances will help you make better choices in the future.
7. Remember that money is just a social construct.
Sometimes we completely and needlessly freak ourselves out when it comes to money. I remember a time in my life when I didn’t think I was the type of person that could make a lot of money. One day I was thinking about that and then I thought, well why not? What is money? And it occurred to me that money is not even a real thing. It’s something that we have completely made up to trade for goods and services. Why am I afraid of something that’s not even real? Money is just a social construct. For whatever reason, thinking of it this way helped me to gain power over it and helped me change my money mindset.
As a final aside, acknowledge that money can be a highly emotional thing. You are a human being who is bound to make a mistake here and there. Forgive yourself when you slip into your old money mindsets and behaviors. Dust yourself off, rise up, and try again. Changing your money mindset probably won’t happen overnight. Rather, it’s a way of thinking and being that will develop over time as you implement these 7 steps.
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