To understand why you are struggling with money, you first have to understand these basic concepts:
Money, Emotions Then Work
Financial Literacy: Income Statement and Balance Sheet
Don’t work for money. Work to learn
These are just a few simple concepts. I will go through them briefly:
Money, Emotions Then Work
Money drives two strong human emotions; fear and desire.
How does money drive fear? Let’s face it, we are all scared of losing money whether you are super-rich, middle class or working class. The fear of losing money is so powerful it can make us lose sleep at night, we can do ridiculously shifts, we can skip meals, ignore our relationships etc. This even affects the rich.
How does money drive desire? We have all had that feeling after receiving a nice BIG pay check or just earned some spare change. Your mind automatically lists all the possible things you can buy. New car. New house. Those new shoes that your friends don’t have. New clothes. New handbag… List goes on.
Once these two emotions have taken control over you, you are in one of life’s BIGGEST TRAP this is called ‘The Rat Race’
The fear of losing money makes you want to work harder and harder, the money comes in, then desire kicks in and then starts thinking of all the things to buy.
WORK -> WORK -> get paid -> SPEND -> WORK -> WORK -> get paid -> SPEND………….
When it comes to money if you let your emotions control you, you will always be trapped in this cycle.
CONTROL YOUR EMOTIONS AND USE YOUR MIND.
Financial literacy: Income Statement and Balance Sheet
Another reason why people still struggle financially, is that they do not know the importance of their Income Statements and Balance Sheets.
Income Statement: is the measure of how much money is coming in and how much is going out.
Assets: is something that increases your income.
Liabilities: is something takes money from you.
In order to grow financially free you need to know the different between acquiring assets and liabilities. This is can be very difficult sometimes because some liabilities are hidden as assets.
Do your research on this, and you are well on your way to becoming financially free.
“Don’t work for money. Work to learn”
People work to earn money and they become a ‘slave’ to it. If you are struggling financially avoid this because chances are it will get worse.
“Money doesn’t bring more money, ideas do.” – MotivationalNetwork
This is a very important concept to understand and integrate into your life.
Whatever you do to earn money, don’t just do it for the pay check at the end of the month, week or day. Do it because you want to learn from it. Identify all the skills you have picked up. Look for ways you can improve yourself.
Then look for opportunities…..
In everything you do you will find opportunities, which will bring more ideas to you. Ideas will turn into money-making opportunities (But you have to have an ‘open eye’ to see a good opportunity).
There will be more posts on financial advice & education. Keep an eye out for it.
Recommendations & Links:
Read Chimp Paradox on Mind & Emotion Management.
Read Robert Kiyosaki Rich Dad Poor Dad Series
Read Grow your Money (Buy it on amazon)
Visit Money Saving Expert on financial education.