Many people blame a lack of available money in their bank account for their financial problems.
It makes sense doesn’t it?
Money is the fundamental component of material wealth.
But, the lack of money is not the problem. It’s merely the manifestation of a number of bad habits and bad beliefs that hold people back everyday.
Some of these are conscious — such as overspending — others are beliefs rooted firmly in the psyche, such as ‘I don’t deserve wealth’ or ‘It’s too hard to save’.
It may sound a bit wish-washy, but the truth is what you believe is what you create.
And if you believe that you’re bad with money, that you’ll never quite have enough, then guess what?
You will always be poor.
The reverse of this is true, too: adopt a healthy attitude and set of behaviours around money, and you’ll have more of it.
So what’s holding you back?
Here are some habits that may be stopping you from achieving financial freedom:
1. YOU SPEND LIKE THERE IS NO TOMORROW
Got a stressful job?
Welcome to the club, you will find many other Australians do too.
But how do you handle that stress?
Do you take a walk, do some cooking or do you buy yourself something nice and expensive?
There’s nothing wrong with treating yourself to the odd purchase. I do at times- it’s called “retail therapy.”
But here is what I’ve noticed…. Lots of people use money to temporarily fix a problem in their life: whether it’s work or a relationship.
This is not only a short-term fix, but it’s also an expensive one if the habit is regular.
Before you splurge, ask yourself: why are you really buying the item?
2. YOU DON’T SAVE
This one is pretty basic, and yet so many Australians have very little in the way of savings.
They get into the mental trap of thinking that savings are always for something specific: a holiday, a new wardrobe, their annual car registration.
But saving for the future is a whole other bank account, and it’s important young people get into the habit early.
The longer they’re saving and then using that money to invest and take advantage of compound interest, the better off they’ll be later in life.
This is where parents need to set an example to their kids too, and instill good money values in them from an early age.
3. YOU LIVE IN THE MOMENT
A devil-may-care attitude can be a good thing, right? You know…a bit of spontaneity in our everyday lives.
But when it comes to money you need to be balanced.
You need to know when to take a risk and when to hold back. Living in the moment, all of the time, is going to backfire eventually as your luck runs out.
Even risk should be planned.
Calculated and well thought-out risks are essential to investing, but many people think they have to be like the Wolf of Wall Street to get ahead: brash and unpredictable.
Slow, steady (and well planned) wins the race.
4. YOU DON’T STICK TO YOUR GUNS
It’s a well known fact that our friends and peers influence us.
That’s why it’s so important to surround yourself with positive people because we’re more likely to adopt their goals and aspirations.
Interestingly I’ve found most successful people are not easily influenced by their peers — be it good friends or acquaintances.
It takes a degree of quiet fierceness to succeed at anything because people will always want a piece of your time, and you will need to learn how to say ‘no’ to the suggestions or demands that will throw you off your project.
Many a great project has been aborted midway through because the entrepreneur or investor listened to the naysayers, or simply didn’t have the courage to stick to their guns and make time for their venture.
5. YOU FEAR FAILURE
Good old failure. It’s an essential part of life and business and yet a fear of it stops many people from ever trying.
They would rather have an idea for a business that could be successful than have one they tried to set up, and failed. Never mind the fact that the lessons they learned in that ‘failure’ were essential to future success.
Then there are those who have a bad run and refuse to get back on the horse. They are gun-shy, and unwilling to take a chance again.
Talk to people who are rich and successful and you’ll not find anyone who has had an entirely smooth run.
The path to financial freedom is pockmarked with upsets and setbacks, but if you have resilience and avoid the most common traps that hold people back, then you will eventually get there.
Michael Yardney is a director of Metropole Property Strategists, which creates wealth for its clients through independent, unbiased property advice and advocacy. He is a best-selling author, one of Australia’s leading experts in wealth creation through property and writes the Property Update blog.