It’s easy to worry about money because so much hinges on it. We can’t get proper healthcare without it, nor can we travel, have decent shelter, food on our plates or even stay connected to our loved ones (because that phone bill has to get paid first). But that doesn’t mean it has to cause us so much strife and worry.
But not worrying about it takes some strategy. Not only will you have to be proactive but you’ll also have to shield yourself mentally from outside influence. Whether it’s the news, commercials, social media or those around us, you’re going to have to think differently than what’s become the norm in American culture.
The norm is to get a job, stick it out for 30 to 40 years and wait for retirement and, in many cases, have all that money taken away from you when you need extensive medical care in your golden years. I don’t know about you but this hardly sounds enticing. This whole path sounds rough, boring, frustrating and even scary.
Make a Lifestyle Plan
We can plan our weekends and vacations but not take the time to make a financial plan. Not making a plan is like driving to a new restaurant but not knowing where it is. Of course, there can be unexpected expenses that can temporarily get us off track no matter how much we plan but having the essentials mapped out can get us back on the road to financial freedom and also get us there faster.
Any financial plan needs to include the bigger picture of how you want to live your life so that you can prioritize how you spend your money, as well as how you make your money. I call this plan a lifestyle plan, which I discuss further in my article Better Than a Budget: Why You Need a Lifestyle Plan.
Some questions to get you started on a lifestyle plan:
- What are the top three to five things that matter the most to you (and your spouse/family)? Go beyond the obvious, such as good health or your loved ones.
- If you could live anywhere in the world, where would you live?
- Would you be in a house, condo, hotel, houseboat, RV…?
- What would you be doing for work?
- What would you be doing in your spare time?
- What kind of people would you want around you?
Make a plan to create this lifestyle or at least one that’s similar. Never feel it’s impossible because even if your dream is to live in Italy, it doesn’t mean you can’t either live there one day or live someplace with that European feel.
The point of this exercise is that it puts you in control of your finances. Practically everyone around you will try to take your money and tell you how you should spend it. It’s up to you to safeguard your money and prioritize it so that it goes towards your hopes and dreams, as well as anything else that matters to you, such as family members.
A lifestyle plan reduces stress because it helps you create the life you truly want for yourself. When we are living lives that don’t reflect who we are and what we truly want, we end up wasting time and money on things that don’t matter that much to us, which creates it’s own stress.
Hone Your Skills So You Can Charge More
How is it that some people can earn thousands—or more—per hour while someone else can earn much less? It has to do with skill set, marketing and confidence. The person who can offer something that’s valued in today’s economy—such as copywriting, effective marketing, top-notch medical care etc—and who present themselves as the go-to person for that skill set can command the most money. In simpler terms, this person is an “expert.”
I wrote about this in more detail in my article 5 Steps to a More Exciting and Lucrative Career but in the meantime, I can give you three steps to take to become an expert in your field of choice:
Get the Required Skill Set
What field are you currently in and how can you improve your skills so you can command more money? Maybe a few classes could change your income dramatically or maybe you’ll need to learn a a completely new skill set that will take you a few years to learn. The point is, there is always a way to increase your income; you just have to be willing to put in the work.
Market Your Offerings
It’s harder to increase your income if you don’t market yourself. Don’t be afraid to put yourself out there as a leading expert. Part of positioning yourself as an expert is simply calling yourself that!
Multi-millionaire Dan Lok began calling himself a copyrighting expert long before he became known for it but his tactic worked: Customers came to him for his “expertise” and because he was getting work from labeling himself as an expert, it soon became a self-fulfilling prophecy.
Maintain Your Position with Confidence
Public perception of you being the expert is one part knowing your stuff, one part marketing and one part confidence. Just think about the difference confidence makes when you’re dealing with other “experts” in your life, such as a doctor.
If you go to two different doctors with an ailment and the first one seems very unsure, compared to the other doctor who tells you exactly what you have and what you need to fix it, you’re going to believe the second doctor over the first—and you’re more likely to return to the second doctor in the future versus the first.
One of the best ways to confidence is to know your specialized skill inside and out and then do it over and over again until it becomes second nature. Once it becomes second nature, you will naturally relax and speak with authority.
You will also want to dedicate yourself to becoming a lifelong learner. The most successful people out there are always hungry for knowledge and strive to improve each and every day. Just because you finished a particular course or project, or even earn a solid wage in your field, doesn’t mean you should kick up your feet and call it good. Being open to improving will keep you on top of your field and keep your confidence up.
Live the Good Life On Less
A lot of people create stress by overspending. They buy things they don’t really need—such as too much house, a new car or designer clothes. This can stem from multiple reasons such as feeling like we deserve it because we work hard, copycatting others, not really thinking it through or even just to impress other people.
What are some items you’ve purchased in the last year or two that you really didn’t need and couldn’t really afford? What were the reasons you bought these items?
If you tend to spend without really thinking about whether it’s something you really need or want and if you can truly afford it, you might want to read my articles Mindful Spending: The Secret to More Joy and More Money and How Selective Spending Increases Your Net Worth. These articles can teach you how to spend your money only on things you truly reflects who you are and what matters to you the most.
The desire to spend in order to impress others means that something is lacking from within. While I believe we should all have standards and that there’s nothing wrong with wanting the nicer things in life, I don’t think we should spend to impress others. If you feel like this is your downfall, I discuss how to get over this in my article Stop Spending Money to Impress People (And Get Rich Instead).
You may have the misconception that living below your means means you’re living a restricted life and missing out. But it’s actually the opposite. When you overspend, you rob yourself of the joy and peace of knowing you can afford just about anything unexpected that shows up in your life. When you live below your means, you give yourself the gift of something worth much more valuable than anything you can buy—financial peace.
And you can still live a great life with a limited income. You can have the nice, comfortable place, a decent car, vacations and more without it messing up your finances. Try reading How To Live Really Well on a Budget and How to Afford a Luxury Lifestyle Even if You’re on a Budget on how to do this.
Learn the Basics of Investing
I’m amazed at how much time people will spend watching TV, reading fiction books, socializing, or even going out of their ways to save ten dollars—but they won’t take the time to learn how to invest. Learning at least the basics of investing can help you feel secure when making choices on what to do with the money you’re setting aside for your later years. It’s also one of the most effective and important ways to dramatically increase your net worth, which I explain in my article How to Become a Millionaire: A Beginner’s Guide.
Part of investing is understanding the huge impact compound interest has on your net worth. Compound interest is earning interest on top of interest and it’s how the wealthy set up their finances to get even wealthier. You don’t have to be a rocket scientist to understand how it works. I provide a simple explanation of compound interest in my post Compound Interest and Passive Income: A Simple Explanation That Will Transform Your Financial Future.
By the way, if you work for someone else, don’t necessarily trust you company’s default selection for your 401(k). I have a relative who recently had her employer change brokerage firms and automatically stick her money into a mutual fund with lackluster returns. We went over her choices and found a fund that historically performed much better, which will most likely make a huge financial difference for her in the long run. She was able to call and make the switch but if I hadn’t learned the basics of investing and helped her with her choices, she would have lost out on thousands and thousands of dollars because the effect of compound interest would have been less.
Believe in Yourself
I love that saying, “Where there’s a will, there’s a way.” No matter where you’re at in life, have faith in yourself to figure it out. If you are able to afford a roof over your head, food on your plate and clothes on your back, you’re doing well. It may not feel that way but, on a global scale, just being able to afford the basics is a big deal. Even if you’re in debt, you can find a way out of it. (Read my article How to Free Yourself From Debt and Live a Better Life if you are.)
My point is, if you’re still here—if you’ve made it this far—than you’re doing better than you think. Trust that, if something adverse does happen (and it probably will), you’ll figure it out. Whether you end up getting laid off, have an unexpected medical bill, have to pay for car repairs or it’s something else, you will find a way to deal with it.
Of course, planning ahead and being proactive is the best defense. But I’m sure you’ve had unexpected things come up in the past and you managed to get through. If it helps, try making a list of adverse situations you’ve experienced in the past that you were able to navigate and get out of. It could be anything—a bad relationship, a tough work project, a health issue…Take a moment to compliment yourself for being tough enough to pull through.
Believe in yourself enough to know that, no matter what happens, you’ll figure it out. But know that a lot of financial worries stem from a lack of planning and understanding, as well as inaction. Take the steps I’ve outlined here and before long, your worry will turn into confidence:)