The new year is just getting unboxed. You entered the year with the excitement of what could be. This could be the year where you achieve all those goals you should’ve accomplished last year. This could be the year for your relationships. This could be the year for your health. This could be the year for your finances. This could be the year of turnarounds.
Or, will this year be just like last year, starting with new sense of optimism and finishing with a familiar sense of defeat?
Since this is a blog about money, let’s focus on the financial piece. Here are some mindsets that will make it really difficult to turn around your finances this year.
1. I should have what they have. The house. The cars. The vacations. They seem to have it all. And now you want it all as well. Historically, keeping up with the Joneses meant that you were trying to keep pace with the lifestyle of those immediately around you—neighbors and coworkers. But social media has expanded everyone’s points of comparison. Now, we are not only comparing ourselves with the neighbors next door, but everyone’s filtered-self popping up on our Facebook, Twitter, and Instagram feeds.
One of the most certain ways to create dissatisfaction is to compare yourself with those who supposedly have more. And “supposedly” is intentionally used in the last sentence. The reality is that many of the people projecting a more expensive lifestyle can’t afford it either. It’s just a debt-laden façade that will eventually result in financial turmoil. So, don’t envy another’s lifestyle. It will only push you to spend more than you should and, on the other side, the contentment you hope to find will be unmasked as regret. Instead, find contentment in what God has given you and continue with your financial turnaround year.
2. I shouldn’t have to wait. We are living in a world where immediate gratification is the norm. I regularly hear the imploration, “But I don’t want to wait until I am older to enjoy (fill in the blank). I want to enjoy it while I am still young.” It’s a dangerous mindset because it flies in the face of how money works. If you’ve read my writings or listened to my podcast, you know this formula:
A little bit of money + A lot of time = A lot of money
Impatience is the enemy of financial health. It destroys a person’s ability to benefit from compounding—making money off your money. Compounding takes time, and spending now instead of saving causes you to miss out on one of the greatest financial resources you have—time. Impatience will only cause you to punt on financial health for another year.
3. I will worry about my money when I get older. Many consider the pursuit of financial health something that older individuals do. When you are younger, why worry about retirement, right? Instead, let your future-self worry about money. This mindset creates somewhat of a self-fulfilling prophecy. If you wait until you are older to worry about your finances, you will worry about your finances when you are older. Those entering their retirement years often say that not saving more and not saving earlier is one of their biggest financial regrets. Don’t push off the pursuit of financial health. Don’t leave it up to your future-self to correct the mistakes you are making now. You will find that your future-self can only do so much, and it is often too little too late.
4. Everything will work out. I know this is going to sound overly pessimistic, but your money problems are likely not going to work themselves out without you putting in the work. And, in general, I’m a fairly optimistic guy. But I also know how money works. And I know the numerous stories of those who assumed that something magical would happen in their finances and fix all of their money problems, only to find that the magical solution never materialized. For most of us, there is no magical solution. Instead, there is persistence, patience, and wisdom. Don’t wait for the magical solution. Without effort, everything is probably not going to work out. So, start working on your finances this year.
This can be a great year for your finances. Start working through the 8 Money Milestones. Start developing a pattern of giving generously, saving wisely, and living appropriately. Don’t let the four mindsets mentioned create another year of should’ve, could’ve, would’ve. Let this year be the year that you look back and say “I did.”