Three common money conundrums – and why they’re all lies

“I just need to earn more money.” This is one of the most common sentiments I hear when I talk to people who want to be doing better financially. The assumption is simple – they’re just not earning enough.

It makes sense. If you earn more but keep your expenses the same, then you’d have more left over, right? That’s simple math. However, being good with money isn’t about simple math.

We all think about money in different ways, but our worries tend to manifest in some common concerns.Credit: Simon Letch

In practice, expenses rarely ever stay the same. Now that you can afford it, it’s tempting to start enjoying yourself a little – this isn’t necessarily a bad thing, it’s healthy to stop living in survival mode once you can afford to. But this means you can quickly end up back in a familiar place of financial stress despite the increased income.

On the other hand, I’ve helped enough people improve their financial position without changing their income, to know that in most cases, you can start doing better with what you have today.

So, if a higher income isn’t holding you back, what is? Some may point to your spending habits or financial education, but there’s another contributor I often see at play which gets little airtime: the stories you tell yourself about money.

Here are some of the common ones. If you want to play along, get out a piece of paper and fill in the blanks for each of the below.

“I need to be ____ to be financially successful.”

This could sound like: … good at math, university educated, further ahead in my career, in a different profession, a professional investor, up to date with finance news etc. (You can do the same exercise with the statement: “I can’t be financially successful without _____”.)

The list you come up with is your list of limitations. For every item, there’s someone who has succeeded without it – and someone who has those things but still isn’t financially successful.

I’m not saying those things wouldn’t help. Maybe they would. But if you don’t have it, why are you making it an obstacle to financial success, when it’s not even a prerequisite? All you need is to earn some money and learn how to save and invest it. That’s it. Everything else is optional.

When you put off taking action until you have more time, money, or energy in the future, you’re undervaluing the resources you have today.

“I can’t get ahead financially because of ____.”

This could sound like: … inflation, the economy, the government, my industry/profession, the housing crisis, my employer, taxes, my spouse and so on.

I’m not saying those things aren’t real, or they don’t make the journey more challenging. I’m not even saying you shouldn’t feel upset about them.

What I am saying is there are still ways to move forward financially, despite those things, but if you only focus on the things you can’t control, you won’t see the opportunities you can control.

I’m saying this as someone who has helped people in pretty tough circumstances improve their financial lives: people on a disability income, people starting over after a divorce, people raising families on a single income and more.

When you focus on the small steps you can take within your control, you start seeing progress. That progress gives you encouragement to keep going, and slowly, you create momentum.

“When I ____, then I will ____”

This could sound like: ‘When I get that promotion, then I’ll start saving.’ ‘When the kids finish school, then I’ll focus on my investments.’ ‘When I get a better job, then I’ll take superannuation seriously.’

By putting it off into the future, you are robbing yourself of the enormous results that can only come as a result of small actions today.

You’d be better off investing $1000 every year from now, than starting with $10,000 in 10 years. You’d be better off changing your super to a growth portfolio in your 20s, than having it sit in the default portfolio until your 40s and then hoping extra contributions will make up for the lost time.

Why? Because time helps wealth grow. The time you think you don’t have to attend to your finances today, is the very same time that will compound the growth of your wealth if you let it.

When you put off taking action until you have more time, money, or energy in the future, you’re undervaluing the resources you have today, and the massive long-term impact of starting with whatever you have available to you right now.

If you did the exercise, you should have a handful of responses for each of the statements. This is the list of beliefs and stories holding you back from taking action towards financial progress.

You might not feel empowered to change the economy, your job, or the housing crisis, but you do have the power to change your beliefs and stories. It might sound like a small thing that won’t make a difference, but in my experience – it’s the first step towards real, meaningful change.

Paridhi Jain is founder of SkilledSmart, which helps adults learn to manage, save and invest money through financial education courses and classes.

• Advice given in this article is general in nature and not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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