by Contributing Author
As the saying goes, money makes the world go round, and that notion only seems to ring truer as commercialism continues to overtake the internet. Can you even recall the last time you went on social media and didn’t see at least five ads for something? Social media can teach us that we need things to be happy or fulfilled, and that belief can cause us to spend money we don’t have. Even if you don’t wind up flat broke, you may still be in the habit of overspending and perpetuating your situation rather than striving toward financial growth.
Wealth comes in many forms, and financial independence is more important than an endless amount of spending money. Adopting a positive, healthy money mindset can help you begin to break free from debt and live more freely without having to constantly stress over your bank account. Interested in learning more? Here are three beliefs about money you should dispel now.
Only Rich People Save Money
You may have heard of the scarcity mindset. It’s a popular belief that people who believe there is a lack of something will not be able to fill it. Someone with a scarcity mindset believes that they will never earn enough or have enough in reserves to do what they want in life. While there are definitive circumstances that cost us a lot, even having a low-income job does not mean you are unable to save.
Savings are for everyone, but yours just might have to look a little differently than you’d like. The issue arises when your cost of living exceeds your income. So, if you’re in the negative every month because rent, food and other bills are too much, it’s time to start planning for an exit strategy. You can’t magically quit your job and wake up with a better one, but you can begin to look for new ones, apply to at least 20 a week and consider taking up a creative side gig. Even if you only manage to save $10 a month, that’s a start. You’ve proven that you can save.
You Should Only Pay the Minimum to Save More
While paying the minimum balance on credit cards and loans might seem like a good idea, it could actually cause you to spend more. Interest tacked onto a loan over time makes the final balance higher than the initial principal. By only paying the minimum, you amass more interest and, ultimately, force yourself to spend even more.
Paying more on things can help you get greater benefits later on. Consider a mortgage. If you pay extra on your mortgage, you build equity faster, which grants you access to a home equity loan or home equity line of credit. These financial assets are valuable tools that give you greater security and access to funds when you need them most. You can read more about borrowing a home equity line of credit in this guide, including how to apply and negotiating flexible terms.
Money Only Causes Problems
Earning more will not make your life harder, but it won’t resolve your emotional issues, relationship problems or other troubles either. Money impacts your life no matter what and how financial stress affects you can ebb and flow as your financial comfort level does. The fact is that cash is a resource. Although we ascribe many values, beliefs and even our own self-worth to our paycheck, it is nothing more than a tool we use to achieve different goals. Seeing money as a problem stops you from maximizing your earnings and optimizing your income. You make choices that are often short-sighted and leave you struggling in the future. Rather than seeing money as problematic, consider it a tool that you want to learn how to use more efficiently. Even with a low income, you can start making money work for you rather than the other way around.