Have you ever wondered why some people seem to be natural wizards at money management while others struggle just to make ends meet? Is there some special gene required to be successful with money?
I’ve found that virtually anyone can successfully manage their money, live sensibly for today while saving for the future, and achieve a money-life balance. The secret has nothing to do with intelligence, but rather the ways we interact with our brains. So how can your brain help you be successful?
Optimist vs. Pessimist
If you’re a naturally pessimistic person, your brain happily jumps on board and helps you fail. Despite your best efforts, if you constantly look for the worst scenarios your brain becomes programmed to let you accept disappointing results.
Conversely, those who are naturally optimistic about the future tend to achieve better results since their brains subconsciously guide their actions with the goal of succeeding.
There’s more as well; wanting to succeed is only the first step. You must also have the desire to act on those wants. Let’s face it, craving success without the desire to act is merely dreaming. So, how can we get our brains on board and get on the road to success?
Obstacles to Successful Financial Planning
The biggest obstacle to successful financial planning is the inability to see the end product. How can you possibly image a safe secure retirement when it’s so far away? Well look around you. There are retired people everywhere in our lives, and a quick study of their success is a great way to set you up for the same results.
Similarly seeing seniors struggle is a great motivator for you to act so you can have a better retirement. These factors can create desire, which your brain will use to change your actions and push you in the right direction. Let’s look at a simple example.
To Budget or Not to Budget
Everybody will advise you to make a budget. The problem is if you don’t have goals in mind, your budget is a useless exercise. So you must set goals, and they must be very specific. The goal could be to save a down payment for a house, to contribute to your company pension plan, or start you own investment savings for retirement. Do that budget exercise and prove to your brain that you can save money every month.
Once you have established a very specific goal and amount, the budget now takes on a very different meaning. Your brain now becomes your enforcement officer, making sure you put the set amount of money into saving for your goal every month. As you begin to save for your goal your brain pushes you harder to continue. It’s a positive domino effect. Success encourages further success.
You Decide Your Own Reality
The great thing about getting your brain on board to achieving your goals is the positive feelings you’ll have. There’s no room left for all the negative feelings that stopped you in the past – you know the usual excuses; there’s no money left to save, it’s too hard, why bother no one else is saving, I refuse to make sacrifices, and so on. If you choose to accept these excuses as your reality, your brain will happily follow along.
The crazy thing about successful financial planning is it has very little to do with mathematical expertise and plenty to do with attitude. Give your brain desire, a specific goal, and a plan and it’ll push you in the right direction. Successful people know this secret and have used it all their lives.
In my E-books (“Water Barrel” and “The Balance”) I discuss simple methods to live sensibly for today, take charge of your financial affairs, and invest safely for the long term. For more information please visit David Penna Amazon.
As always, I am not a qualified financial advisor. I just relate financial management to my own experience which may not resemble yours at all. Advice is frequently worth exactly what you paid for it. Most of mine came from expensive experiences.