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Four Personal Finance Tips to Help Change Your Money Mindset

There is no denying that money is an integral part of everyday life. You need it to pay bills, acquire possessions, get food, and save for the future. While it holds a certain importance and status in life, being prudent with money is also key. Knowing how to use money to further your goals may require a shift in your mindset. According to Cristina Guglielmetti, president of Future Perfect Planning, people who have undisciplined spending habits may be reluctant to acknowledge their financial situation. This makes it easy to pretend spending isn’t what it actually is. So, how do you shift your money mindset? Here are a few tips:

1. Take an Honest Inventory of Your Financial Life

You may not be happy where you are financially, but you cannot move ahead and take steps to fix things unless you are honest with yourself about your situation. Assess your finances – have you been wise in your spending? How is your credit? Do you have a budget? Do you have a savings plan? Are you on track to retire? Are you in debt? Taking stock of where you stand when it comes to your finances is the first step.

2. Action Cures Financial Anxiety

The only real solution for improving your financial situation is address it now. Even if you have had financial difficulties, continuously avoiding the problem is not going to fix it. In fact, it most likely will just make things worse. You may be feeling as if you can’t get out of the rut, but the only way to make progress is to get started. Action cures anxiety.

3. Keep It Simple

Don’t make things complicated. Use a simple method to assess your income and bills – write it all out. Then, take note of where you can cut spending and start small. One of the best ways to start getting your savings in order is to automate the process. You can’t spend it if you don’t see it. Make sure the money is going into savings and retirement accounts by automatic transfer and limit your accessibility to those funds. You will be surprised how quickly little amounts can add up.

4. Avoid Lifestyle Creep

This means living below your means and not having to keep up with friends and neighbors (those new car payments last a whole lot longer than the new car smell). Set a goal to live on 90% of your take-home income. Graduate from a “Paycheck Mentality” to “Net Worth Mentality”, building wealth is more important than accumulating things, especially things that depreciate over time. And when you get that promotion, have a nice celebration and bank a significant amount by increasing your automatic transfers to savings and retirement accounts. Don't be a creep.

Changing your mindset can be challenging, but it’s doable once you commit to it. Things may not go smoothly in the beginning, but persistence always win in the end. If you need assistance, consult a financial planner who pledges to be a fiduciary working in your best interest.


Investment advisor representative of and investment advisory services offered through Garrett Investment Advisors, LLC., a fee-only, SEC-registered investment advisor. Tel: (910)-FEE-ONLY. Fialkow Financial Planning may offer investment advisory services in the States of Florida and Texas and in other jurisdictions where exempted.

This communication has been provided to you for informational purposes only. Although information in this presentation has been obtained from and is based upon sources that Garrett Investment Advisors, LLC believes to be reliable, Garrett Investment Advisors, LLC does not guarantee its accuracy and it may be incomplete or condensed. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.