5 Changes you MUST make on how you see finances

Ben —  May 25, 2011 — Leave a comment

If I think differently about finances, I will live differently with finance.

Rom 12:2 Don’t copy the behaviour and customs of this world, but let God transform you into a new person by changing the way you think. Then you will learn to know God’s will for you, which is good and pleasing and perfect.

With spiralling personal debt levels and increasing numbers of Australians finding themselves in financial difficulty, the ‘old normals’ of financial wisdom don’t seem to be working anymore.

Just ‘going with the flow’ of what our current culture tells us is normal probably won’t help us too much. Many Australians fall into damaging ways of thinking that hold them back financially. We need to make some strategic shifts in how we think about and handle our finances.

Five Strategic Changes in our Finances:

1. Don’t adopt a ‘victim mentality’: How quick we can be to blame everyone else – the system, the Government, the economy, our upbringing, our workplace, our luck for my financial situation – never taking full responsibility ourselves. Don’t harbour self-pity – it can set us up for many recurring problems.

How often can we be judgemental towards those who are financially better off than ourselves, when we should actually be learning from them? We can easily assume that someone’s wealth comes from inheritance when often it doesn’t. It’s the particular attributes that enable rich people to become rich in the first place that help them to keep growing richer.

2. A new Paradigm: Most of us have grown up with a somewhat skewed understanding of money and possessions. Based on misinformation, poor examples and our own desires, we have unconsciously developed a certain paradigm for managing our income – from the very first five dollar bill we were given in a birthday card, to our first pay-cheque, and with all we’ve received since then. Unfortunately faulty financial paradigms have led many of us into trouble. Our largely misguided collective perspective has landed our society in the grip of major debt, high stress and anxiety levels and an increasing number of broken families.

Perhaps you feel as if money has control over you right now; most likely it’s because your paradigm is giving it control. Convinced that you’ll never have enough? Your paradigm has given you this false belief. Maybe you are so far in debt that you can’t see a way out – it’s your financial paradigm that got you there.

3. Adopt beneficial Financial Values: You may not have realised how important values are. The collective sum of your values regarding your finances makes up your financial philosophy. Most harmful financial habits are a result of people viewing their finances wrongly. If my priorities are out of balance, I may need to rebuild a new set of financial values.

4. Overcome destructive habit patterns: Do I fall prey to impulse spending in the shopping centre or on the net? Am I always slavishly chasing the latest gadgets? When I get a pay increase, does the extra all just seem to slip through my fingers on frivolous spending?

5. We need to develop a new financial mindset – reassess our attitude to finances as a whole. We all carry around a particular world-view, strongly influenced by:

  • Our upbringing
  • Our society, current culture
  • Our demographic
  • Education in the area e.g. through reading, financial advice or training. Many people receive little or no deliberate input in this highly significant area even though it affects so many other areas of our lives.
  • Relationships – these are actually more important to our financial standing than we might think. The kind of people we spend time with will have a strong affect on our financial aspirations. If you want to progress towards the next level in your finances, spend time with people who are ahead of you. Seek out good training, mentoring and financial advice.

The way we see things is the source of the way we think and the way we act.’ (Stephen Covey)