There’s one simple thing that’s guaranteed to change your life for the better! And that’s learning to be in control of your money. As a wealth coach, I’m passionate about my clients’ finances – and showing them how they can live a better life by gaining control of them.
My core belief about money is that it’s a tool that you can use to live the life you want! But that only works if you’re in control. Without financial discipline, money can rule your life in a really negative way.
I also believe that money itself won’t make you happy though. Over the years I’ve heard plenty of stories about miserable millionaires. But being in control of your finances, and having a base level of financial security (which I will discuss a little later), means you will have money available to allow you to do the things that make you happy.
That may be travelling, pursuing your passions, starting a business, or spending more time with your family and friends. The ‘money guy’ in me wants to say that while doing these things, you still need to be focused on building long term wealth. A good way to do that is to invest with the future in mind, and turn your income into assets. By being in control of your money, you have the freedom to choose how you want to live without the worry of not making ends meet.
Let’s talk about 3 things you can do right now to take control of your money. Once you have these three things in place, you’ll be in a position to start using your money to live the life you want.
- Make a budget – this is the starting point for anything to do with your finances. Be it pay down debt, build up savings, go on holidays, or create wealth.
You need to know where your money is going each month to get ahead – what comes in, what goes out and what you have left each month to put towards your goals and the priorities in your life.
- Build a cash safety net – start by aiming to build up $1,000 – $2,000 in a savings account, and from there work towards having three to six months of your living expenses saved as a cushion. How big this number is will depend on what it costs you to live your current lifestyle each month. You’ll get this number after completing step 1.
What having this money will do for you is to reduce your financial anxiety. Looking at your bank account and seeing a big $0 (or not much) is not a good feeling, and can cause people stress.
That money will mean that you have a safety net that you can draw on in the event of an emergency. That way, if your car breaks down, your fridge blows up, or an interstate relative gets sick and you need to be by their side, you know that you’re covered.
Once this strategy is completed and you have your safety net in place, you will never have to worry about a credit card ever again.
- Pay off and get rid of any short-term debts that you have – this includes credit cards, store cards, personal loans, and any other ‘bad’ debt that you have. That’s any loan that isn’t for either a property or an investment that will go up in value over time.
If you have any debts like the ones I just mentioned after you’ve saved at least $2,000 for your safety net, you need to focus on paying these off ASAP. That’s because they will be chewing into your budget each month and taking up the money that you could use to put towards your goals. They’re also expensive and are usually attached to interest rates of 13-22%.
This means that your debt is increasing all the time unless you are paying more than the minimum repayment (which most people are not). If you do have these debts – work hard, start paying them down by paying more than your minimum repayment, and get rid of them for good.
The three steps I just discussed – get a budget, build a cash safety net, and get rid of your short-term debts – are three things that are all within your control. And they’re things you can do right now to start you on the path to financial security.
These are the first things I look to do with all the clients I work with, even the ones with a lot of income or assets. Once these steps have been implemented, they will help you to feel in control of your finances. From there, you’re in the position to start using your money for the things in life that make you happy.
Some people may have all of these three points sorted already, and that’s a great place to start! But these are still only the starting steps and there’s still a way to go. Check back with our blog regularly, as we’ll continue to update it with more advanced tips and strategies.
As I have said multiple times throughout this post, money can be used as a tool to help you to live an amazing life, if you are in control of it!
That’s why I want to help you, by giving you this article to use as a starting point. This will help you take control of your money, and put in place the foundations that will let you achieve your financial goals and live the kind of life you’ve been dreaming of.
Ryan Porter is a Wealth Coach at Catalyst Wealth Group. His mission is to help his clients achieve financial success and live their ideal life.
Disclaimer: Any advice or information in this publication is of a general nature only and has not taken into account your personal circumstances, needs or objectives. Because of that, before acting on the advice, you should consider its appropriateness to you, having regard to your objectives, financial situation or needs.