Effective Money Management Comes from Your Money Mindset: FPAM

(photo credit: credit counselling society)

When it comes to effective money management, having the right Money Mindset serves as one of the critical components. You may possess the physical tools such as money and financial instruments, but without the right Money Mindset, it will be a real challenge for you to accomplish any of your goals.

Have you ever experienced any of the below situations:

*Your money in bank account magically disappears by the end of every month.

*You feel stuck in your current situation but you are afraid to move forward due to past financial mistakes.

*You want to learn and improve your money situation, but you have delayed it until now.

*You constantly tell yourself “You will never be good with money”.

Money Mindset, briefly explained, is your attitude and beliefs towards money. It influences on how you manage it – saving, spending, taking on debts and many more. Most people have different Money Mindset because it is largely influenced by their past experiences with money. The experiences could come from how our parents managed it and the money values that society have shown to us since young.

If you have experienced any of the 4 situations above, below is a list of 4 key methods to shift your mindset about money:

You are in control of your money. You are in control of your money. You will assume the responsibility of a master and instruct where, when, how much of your money to save and to be spent. You will start to keep track of their entry (income) and exit (expenses) every month. You will be made accountable to how your money is managed and never again be surprised on their whereabouts.

Don’t dwell on your past financial mistakes. It is painful and regretful when you think of the past financial mistakes that you have made, but what mistakes in life doesn’t do the same? You have probably heard of “failure is the path to success”. What it meant is you have found a way that didn’t work; hence you will continue to find the one way that will help you the most.

Leverage on what you have learnt in the past to make a more informed financial decision that could improve your financial situation in the future. Reduce your overthinking, just do it!

Allocate time and effort to improve. You want to be better financially but there are always more important things to work on, thus it is delayed indefinitely. Isn’t this contradictory to what you want to be?

If you want to Do-It-Yourself (DIY) on your personal financial matters, there are many free educational resources on the internet. You may not be able to understand all of them however, you will be better than yesterday when you learn something new.

If you want financial professionals’ assistance, go ahead to look and interview them to understand their skills and methods on how they managed their clients’ financial affairs and how they can assist to support your goals.

The most important factor is you are willing to allocate time and effort to take charge of your financial matters and only though this, then you will see positive changes in your financial situation.

Let go of limiting money beliefs. Most of us have a second “voice” in our mind, constantly talking to us about the money
saving methods that we should not bother trying or the losses that we could face if it doesn’t go according to our plan. These are examples of limiting money beliefs and they are a major roadblock to your self-confidence. Basically, they limit your choices of what you can try.

I agree, it isn’t easy for you to push them aside but then again, you didn’t say it is impossible. One way to overcome this is to write it down, for example: “I will be good with money, and I will be in full control of it.” Affirm this thought to your mind every day and this will help you to shift your limiting beliefs to an unlimited one!

In conclusion, having the right Money Mindsets such as the 4 key methods above will directly improve the effectiveness of your money management. Finally, learning about the best practices of Money Mindsets is not a touch and go approach, because you will need to constantly learn, practice, and review the results, just like we are building our body muscles. So, let’s get started!

Article contributed by: Fong Woon Bing, CFP is a licensed financial planner with VKA Wealth Planners Sdn Bhd. He is also a certified member of Financial Planning Association of Malaysia.

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