I grew up in extreme poverty and that shaped my mentality on money. For many of my formative years I was focused on surviving. I definitely wasn’t being taught things like how credit cards work or how to save for retirement, but rather where my next meal would come from or if I’d have running water and be able to take a shower.
After I finished college and worked for a year, I realized I’d made good money (at least by 23-year old standards) but had nothing to show for it. I was left wondering where did all of my money go?
I started researching everything I could about personal finance. I spent thousands and thousands and thousands of hours reading books, listening to podcasts, watching YouTube videos and googling just about every single financial topic you could think of.
And after all of that…I’ve reached a point in my 30s where I could stop saving any money and still retire comfortably in my early 40s.
My point is, if you’re totally confused about how to manage your money and grow wealth, I feel you. It’s confusing AF and hard to know what to do.
I spent years trying to figure it out and I learned so much along the way.
Around here, we don’t gate keep. It’s backwards that we don’t prioritize financial literacy in this country. All of this only feels hard because we haven’t been taught to do it. So, I’m going to let you in on 5 realizations I had about money that literally changed my life so you can practice them too.
You Have to Have a Budget
You cannot know whereyour money is going if you do not set up a budget.
I know, the B word gets a bad rap. People associate it with restriction. Oh, I can’t buy that; I’m on a budget.
I don’t find it restrictive at all! I find it incredibly freeing. That sort of thinking is like the Keto diet. You can watch your weight and eat carbs just like you can build wealth and go on your dream vacation to Thailand.
Budgeting just means being intentional about what you’re spending your money on.
I say it all of the time because it’s true: we can have anything we want, just not everything we want at this very minute. A budget doesn’t keep you out of your favorite restaurant for date night, it simply allows you to know you can afford to go to that restaurant and pay your rent each month.
Intentional spending > mindless spending every time.
All Debt is Not Created Equal
Once you realize how money works, you realize your money works harder in the stock market than paying off low-interest debt.
Now, high-interest debt like credit cards? That will eat you alive. That’s the debt you want to make sure you get out from underneath.
But your car loan, student loan, mortgage and debt with around a 6% interest or lower? I’d pay them off slowly.
It may feel like you should throw all of your extra money at that huge student loan balance or your mortgage, but you can do better by investing that extra money in the stock market. Compound interest will actually work for you.
Investing is a Must Not a Might
I always thought investing was for rich people. Growing up, I never heard anyone talk about their investment portfolio unless it was some fancy shmancy person on TV.AKA people who did not look like me.
But investing is actually a must for everyone, not just a privilege reserved for the elite. I really wish I’d understood this sooner.
We cannot save our way to wealth. There’s no emergency fund, high-yield savings account, or box under our mattress that will ever amass enough money to beat inflation, which eats away at our money a little each day.
The only way to conquer inflation is through investing.
And guess what…you don’t need a lot of money to invest. You can start investing with literally $1! Now, you obvi need to invest more than that to build true wealth, but building those good investing habits early on, even if it’s just a little money at first, is key.
Know That You Can Become Financially Literate
Like investing, good money management skills in general just seemed like it was not for me. Like a secret club people could join only if they’d gone away for boarding school or have actually ever been on a polo field.
When I was ready to fix my financial mess and started doing my research, I quickly became overwhelmed. The finance industry is littered with jargon and acronyms and overcomplicated terms. Also, the finance industry is filled with know-it-all-finance-bros talking into their podcast mics about do this and don’t do that.It was a huge turnoff.
However, I’ve learned that it only ever felt difficult and exclusive because it was new to me.
We work way too hard for our money to not be educated on the best ways to manage it. Once you “get it,” you’re going to kick yourself for not learning earlier.Remember: It’s not HARD, it’s just NEW.
Money is Negotiable
Negotiate.
Everything.
I’m serious. Just do it.
Every bill. Every salary. Every used car. Every couch. Every benefits package.
All of it is negotiable.
It may feel silly to call up your credit card company and ask for a lower rate. It may feel scary AF to set a meeting with your supervisor to negotiate a raise.
You know what? Do it anyway.
We work way too hard to just take what is handed to us. Learning how to negotiate effectively can allow you to accrue hundreds of thousands more dollars over your lifetime!
Wrapping Up
Don’t let your mentality about money hold you back. It can feel scary to dive into something new and maybe even a bit stressful!
You can learn how to manage your money like the badass you are though and you can unlearn any bad habits or mindsets about money you’ve picked up along the way. Just like you learned to ride a bike a little each day or learned the ABCs one letter at a time, you can learn to become financially literate too.
Ready to have your own money realizations? Check out my course bundle that walks you through everything from budgeting to debt pay-off to investing.
