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5 Money Myths You Should Ditch

Ladies, we’ve come a long way in the last 100 years – we can vote, buy property, take out a mortgage and run a business but many of us don’t take responsibility for managing our money. Money is one of those topics that have a lot of ‘collective wisdom’, but in reality, this common knowledge can actually be holding you back from having more money.

September 4, 2020

Money is one of those topics that has a lot of ‘collective wisdom’, but in reality, this common knowledge can actually be holding you back from having more money.

Here are 5 money myths that could be limiting your financial situation.

1. Budgets Are Boring

I get it – the word budget doesn’t exactly scream‘good-times’ and there’s a stereotype that budgets restrict and constrain us.  It’s just not true. The brilliance of a budget is that it gives your money a direction and purpose.   It allows you to take control over where your money goes – you’re in the driver’s seat. If you’re not in control of your money, your money is controlling YOU.

Ask yourself, what is the REAL resistance to spending time going through your expenses?

Most of the time, we spend without thinking.

THE FIX: Become conscious of how you spend your money (using a budget or cash flow tracker) and actively decide what you are going to spend your money on.  This awareness will lead you to using your money better.

People who practice conscious spending deliberately allocate money to what truly makes them happy, cut costs in other areas,without feeling deprived or any other negative ‘budget-related’ emotions.

A budget is your best tool for having more money in your life, to fund the way you truly want to live in the future.  What’s boring about that ?

 

2. I’m Just Crap At Money

The human brain is super powerful, but comes with flaws- it believes everything we tell it!

The more you tell yourself something (like, I’m not good at managing money), guess what, then that is exactly what you will experience.  Our brains operate like a GPS system pulling into our lives everything it thinks we want.

Every time you do something crappy with your money,you are confirming this belief and at the same time, being totally critical of yourself and your behaviour.  This confirmation just more deeply ingrains the belief that ‘I’m not good with money’.  

Ever heard of self-fulfilling prophecies ?

THE FIX: Change the language of how you describe yourself and money.  Instead of saying to others(and yourself) “I’m bad with money” say: “I haven’t yet learned the skills of managing money, however I’m going to”.

Telling yourself this is a more empowering way to think about and talk about money.

Next, forgive yourself for your past money mishaps –I mean truly forgive yourself.  We’re not sent off to Money School to learn this stuff, so unless you had strong parents to model, it’s really not your fault you aren’t as successful with money.  It’s not your fault, but it is now your responsibility.  Take action to learn.

 

3. Talking About Money is Off-Limits

I was raised to not talk about money, religion or politics.  They were rules I followed and I doubt I’m not alone there.  Money has long been a taboo topic.  

As a result, money conversations can make people uncomfortable due to the stigma of the topic, having a lack of money, lack of financial knowledge or at the other spectrum, having an excess of money.  All these beliefs create emotions that cause us to avoid the talking about money, at any cost.

Not talking about money, is costing us.  

The more we talk about money, the more empowered and knowledgeable we will all be, especially as women.

THE FIX: Set a goal to find someone you feel safe talking about money with – you’ll learn from other’s experiences, reduce confusion,help your own decision-making and stay informed.  When you start these conversations, it is important to be aware that emotions are attached to money and conversations could be awkward initially but the more you practice the easier they’ll get.  

I also recommend seeking out conversations with people that are financially successful and have created what you want.

 

4. I’ll start Saving Later, I want to Enjoy My Money for a While

Do you ever feel like you’ve ‘spent’ your money before you’ve even earned it ?

There’s never going to be a better time than now, to start saving.  Even if it’s only$20 a week, it starts the savings ritual to build from.

75% of young adults don’t make savings a priority when they start earning an income.  This is such a mistake (learn from my BIG mistake below), because it’s the best time of your life to create and maintain healthy financial habits to set you up for life and take advantage of compound interest.

THE FIX: It’s a simple strategy- save 10% of everything you earn.  

My Dad introduced me to this concept when I was 12 years old (via a book called The Richest Man in Babylon).  Sounded interesting yet didn’t grab my attention too much, as I didn’t give it another thought until I was about 30+years old.  If only I’d done that simple act of putting 10% of my pocket money and earnings, each year, into a savings account then invest it.  

That fictitious bank account (or portfolio) I should have started, would be worth over $404,000 today (based on earning a 4% p.a return), which is very conservative or at an 8% p.a return, I would have accumulated – wait for it… over $616,000.

WHY don’t kids (read me) listen to their parents…….. ?  make your children listen for the 616,000 reasons I didn’t see.  And if you’re in your 40’s like me, if you didn’t start early, the second best time is, TODAY.

 

5. My Husband (or Partner) Manages the Money, So I Don’t Need to Worry About It

Ladies, we’ve come a long way in the last 100 years – we can vote, buy property, take out a mortgage and run a business but many of us don’t take responsibility for managing our money.

This avoidance of managing money has nothing to do with lack of skill or intelligence, and everything to do with our mindset and confidence.

I truly get that it’s not something you may yet know how to do, we’re not taught Money 101 at school, so unless you had money-savvy parents, it’s not your fault if you don’t know anything about money - the education system fails us here. However, there comes a time, when it is your responsibility.

Questions you should ask yourself:

-       Is my husband/partner good at managing our money?

-       If I learned how to manage it, could I do it just as good, or better?

-       What would I do if he dies before me?

-       How will I manage my finances if we separate?

THE FIX: Get involved with your finances.

Even if you aren’t the one paying the bills, applying for loans or investing, know what’s going on. Have a say in the family finances, grow an interest and a voice on what your money is spent on and know how much should be saved to reach your goals.

One thing couples’ disagree about the most, is money.  Communication, expressing your needs and concerns, and clarity on your joint finances builds trust in a relationship.

Get financially curious about where your money is going and what you believe about money.

 

So, which Money Myth best resonates with you?
These money myths are self-imposed limitations, excuses and justifications that live in your head.  The beauty is, they can easily be replaced with new beliefs like:

-       I used to be bad at money, but I’ve changed this and am getting back in control of my finances, allowing me to put more into my bank account, super and investments;

-       It is possible to get ahead financially by taking one step at a time, being focused and putting in the time;

-       I am focusing on ways I can increase my savings and learning the best strategies for investing this money;

-       Talking about money is liberating and I understand I’m not the only one with financial fears or past financial mistakes.  Being open and honest about money is allowing me to grow and setting me up for financial success;

-       My budget and cash flow systems are building my wealth so I can have more time and money to do the things I love.

 

Which Money Myth are you going to ditch and replace – today?

 

Warmest,

Karen Eley is a financial coach with more than 20 years’ experience as a financial adviser. Through her business, Women Talking Finance, she helps women to be confident and knowledgeable about all things finance. Karen translates complex financial concepts into simple digestible ideas.

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