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7 Faulty Money Beliefs Keeping You Poor

7 Faulty Money Beliefs Keeping You Poor

Chances are you have faulty beliefs about money, which keep you from coming into it. Here are 7 faulty beliefs you might have and what to do about it.

The first thing to get straight is this: Money serves you. You are it’s master and it is your faithful servant. Never get this the other way around. Money serves two purposes: It allows us to live comfortably. It is also a vehicle that lets us do good in this world. Let money serve you.

Money Isn’t Everything

Some people believe that money can’t buy happiness. They pretty much choose poverty over prosperity, thinking that happiness comes with scarcity. Yet, part of having an abundance mindset means the best of both worlds. After all, money is just an indicator of success. Poor and unsuccessful people have made it a habit to avoid doing things that improve their skills and this guarantees failure.

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On the other hand, successful people have a habit of doing things that help them progressively realize their goals and dreams. While you may want to remain static, the truth is you either create or disintegrate.

You Don’t Know How to Receive

How many of us know how to ask for money or negotiate salaries? How many of us know our true worth in the value we can provide? I sure didn’t. I had helped my friend remove malware from her shop’s computer. It took me less than an hour, and she wanted to pay me for my time. Yet, because I didn’t know how to ask for money or the worth of the knowledge I possess, I stupidly refused the money.

Luckily for me, my friend insisted. More importantly, she helped me realize that my knowledge and experience are not just for my employer. I can also help other people, and I should be bold enough to ask for money. After all, while it may have taken less than an hour to remove that malware, it’s taken me twenty years of constant study in front of the computer to build up that knowledge base and expertise.

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You Lack Gratitude for the Money You Do Have

Just as we don’t know how to receive, when we do receive, we don’t know how to express gratitude. Start off simple and express gratitude, when you find a dime on your garage floor or a dollar bill in your laundry.

Gratitude is a re-framing of our minds, which opens us to receiving and expands our awareness to possibilities. Possibilities increase our chances of success.

You Have a Poor Self-Image

You can only grow as far as your self-image will allow. If you ever want to make six-figures at your next job, then you have to first believe you can. Your bad self image makes you believe that you are undeserving and a fraud. Mainly, it’s been poisoned by other people’s beliefs.

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Once you believe you bring a unique value to this world that you alone can provide, you become aware that you deserve an abundance of happiness, health, and wealth. This accomplishment is something greater yet as it is an expansion of your awareness and true self-growth. Only when you are able to see yourself worthy and deserving of a six-figure salary, will your future employer see it too.

Money Tore Your Family Apart

If your parents worked many hours to make ends meet and lived from paycheck to paycheck, chances are you hardly ever saw them or spent time with them. Consequently, your relationship with them may be estranged.

Its likely that you subconsciously blamed money for creating a rift in your family. Because of this, you may be pushing money away without even knowing it, all in the name of “choosing family over money.” To change this harmful belief and be welcoming of money, start adopting the beliefs in this article.

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You Know Nothing

Our educational system fails us in a big way. It trains us to be good employees and help makes our employers dreams come true, jeopardizing our own dreams. It fails to teach us how to create wealth, how money really works, how to run a business and how to chase after what really matters. Too often, we’re told in school, “Stop daydreaming! Be realistic. Learn a trade and you’ll have the security of a decent living. ” Decent may be good, but great is even better.

So, it’s up to you to educate yourself in these areas. Make it a point to read at least one book on money a year. When you start digging deeper, you’ll quickly discover that most books about making money have nothing to do with actually making money. It first starts with changing your beliefs about money. These books are often a journey in self-improvement. In short, your success and wealth can only grow as fast as your willingness to improve.

It Starts With You

One of the common threads running through the 7 false beliefs has to do with blame and your willingness to take responsibility for your current results. Unsuccessful people blame their circumstances or other people. On the contrary, successful people accept their circumstances and take the initiative to improve what they can. Even if the problems seem insurmountable, they start acting from where they can.

To bring more money and success into your life, first make a decision to throw out these faulty beliefs. Be willing to accept new beliefs that are conducive to your goals. When we start educating ourselves, we also start expanding our awareness to what’s possible.

In the end, the decision to come into an abundance of wealth and success has more to do with setting goals and growing, than it is about the money. As you embark on this journey, kindly remind yourself from time to time that goals aren’t about getting. They are about growing.

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Benson Wong

Benson aspires to help people shift their paradigms and live a more fulfilling life.

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Last Updated on July 10, 2020

The Definitive Guide to Get out of Debt Fast (and Forever)

The Definitive Guide to Get out of Debt Fast (and Forever)

Debt can feel crushing, like a weight that is always weighing you down. Looking at those numbers, it can feel as if you’ll never get out from under it. However, if you really want to learn how to get out of debt, it is possible with a great deal of focus and self-control.

Getting out of debt isn’t impossible. Like any big goal, all that it takes is an action plan to identify where you are and creating a plan to zero out your debt.

Identifying All of Your Debts

The first part of paying off your debt is getting a complete picture of what you owe. When you have everything written out in front of you, it makes it much easier to create an action plan. Depending on how much you owe, it might also help you realize it’s not as bad you might have originally thought.

Here’s how you can get started identifying your debts:

1. Own Your Debt

Before you start identifying all of your debts, take a moment to process that you have debt but want to get out of it.

Forgive yourself for any past mistakes, missed payments, or overspending. It might be painful to accept how much debt you have at first, but you must own it.

2. Make a Debt Tracker

It’s astonishing how few people ever created a tracker to understand their total debts. Most likely, it comes from not wanting to accept the guilt of having debt, but, if avoided, it can make it nearly impossible to get out of debt.

Open up a new Google or Microsoft Excel sheet and list out all of your debts. Start with the name of the creditor, interest rates, total balance, loan term length (if any), and the minimum amount due each payment. This will include student loans, credit cards, and any other type of debt owed.

3. Get Your Debt Number

Once you’ve made your debt tracker and taken the other steps, identify your total payoff number. This is crucial, as you will have a starting point and a clear goal that you are trying to achieve.

Prioritizing Your Debts

All debt is not created equal. It’s imperative to understand that there are different types of debt.

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1. Understand Bad and Good Debts

Bad debts are usually paying for things you want instead of always need. While there might be some emergencies that max out your credit cards, often times it’s excessive spending[1].

There are three main types of bad debt:

  • Credit Card Debt: The average American household owes over $16,000 in credit card debt!
  • Auto Loan Debt: According to CNBC , the average auto loan in the US is $30,032!
  • Consumer Loan Debt: Consumer loan debt isn’t as common as credit card and auto loan debt, but it’s still considered bad as interest rates are usually between 10-28%.

Good debt is identified as investments in your future. Here are three common types of good debt:

  • Student Loan Debt
  • Mortgage Loan
  • Business Loans

2. Decide Which Debt to Pay off First

Once you know each type of debt and their interest rates, you can begin to pay off debt quickly.

Focus on paying off bad debt first, regardless of if it is a credit card or auto loan. Start by paying off the loan with the highest interest rate first.

If you have several credit cards with different interest rates, you want to focus on the one with a higher APR. You will actually save more money by eliminating the card with the highest interest rate.

3. Don’t Pay the Minimum Amount

Paying the minimum amount digs you into a hole as interest rates will offset your payment. Even a small amount more than the minimum can help you pay off debt much faster.

Removing Obstacles to Pay off Debt Quickly

Creating a debt tracker and prioritizing a plan is simple, but avoiding temptation can be difficult.

1. Set a Reminder to Track Your Debt

“If you can’t measure it you can’t manage it.” -Peter Drucker

It’s so important to track your debt to ensure that you get it paid off quickly. Similar to working out and measuring your results, you need to track your debt constantly. Start with a weekly reminder, where you sign on and log your updated number. Did you increase, decrease, or stay the same?

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Regularly tracking your student loan balance can be incredibly motivating, as well. You will get a huge confidence boost each time you see your total debt amount decreases.

Set weekly and monthly goals so you can have short term wins and keep the momentum going.

2. Hide Your Credit Cards

If your biggest debt is credit cards, you need to eliminate temptation and remove them from your wallet.

Some people have gone to extreme measures by freezing their credit cards. Why? This would create an ice block around your card, which would require you to chip away at it slowly. This will give you time to think if it’s the best idea to buy that thing you’re about to buy.

3. Automate Everything

Willpower can be a huge downfall to paying off your debt. By automating your bills each month, you will ensure that willpower isn’t involved.

4. Plan Ahead

Getting out of debt will require some sacrifices, but with enough planning, you can make it work.

For example, if you know that you have a friend’s birthday or family dinner coming up, plan ahead for the costs. Whether you need to cut back on spending the week before, pick up a side job, or meet them after dinner, do what is needed.

5. Live Cheaply

The only way to get out of debt is to make some sacrifices on your spending habits. Find ways to save money each month so you can apply that amount to your outstanding debts. Here are some ways to save money each month:

  • Live with roommates
  • Cook dinners and prepare lunches for work instead of eating out
  • Cut cable and choose Netflix or Amazon Prime
  • Take public transit or bike to work

Finding the Lowest Interest Rates

The higher your interest rates, the harder (and longer) it will take you to pay off any debt.

If possible, you want to find ways to lower your interest rates to help get out of debt quickly. Here’s how you can get started:

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1. Maintain a High Credit Score

Your credit score will have a large impact on your ability to refinance your loans and receive a lower interest rate. If you have a low credit score, it’s unlikely you will be able to refinance your loans. Use these credit tips to increase and maintain an excellent score:

  • Never miss a payment
  • Don’t exceed 30% of your credit limit
  • Don’t sign up for more than one card at once
  • Limit hard inquires, like auto-loans and new credit cards
  • Monitor frequently with free credit-tracking software

2. Find Balance Transfer Offers

Start by opening a free account on credit.com. Credit.com offers you the chance to open a free account and see what type of balance transfer offers you can receive. Some of your existing credit cards might already have 0% or lower APR balance transfer offers available.

Contact each of your credit card providers to ask about lowering your rate for a one-time balance transfer offer[2].

If you do take advantage of this option, make sure that you use a balance transfer and not a cash advance. Cash advances have a ton of high interest fees (15-25%, depending on your credit card) and will only compound your debt problem.

How to Get Rid of Debt Forever

Setting up a plan, removing temptations, and getting the lowest interest rates is the first step to get out of debt.

1. Keep Monitoring and Adjusting

Once you have a plan, don’t get comfortable. Track your debt payoff plan and make the necessary adjustments when needed.

Monitor your credit scores with a free site like CreditKarma. The higher your credit score climbs, the more likely you will be to secure a new, lower-interest loan.

2. Earn More Money

There are only so many ways to save money. Instead of clipping another coupon or making sacrifices for your morning coffee, find ways to earn more money!

Think about it…it is much easier to find ways to earn an extra $1,000 per month than find $1,000 to cut from your budget.

Here are some examples of ways to earn more money:

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Talk to Your Boss

Have a conversation with your boss about current salary and/or commission rates. If you’re not satisfied or want a change, don’t be afraid to look around at other positions. Some of them might even have a student loan debt reimbursement plan!

Start a Side Hustle

This could be coaching students on the weekends, driving for Uber, or taking paid online surveys. There are tons of ways to make money outside your 9-5. Now that you have a clear plan to pay off your debts, you’ll be more motivated than ever to figure out creative new ways to earn money.

Build an Online Business

There are so many websites and blogs that earn money from ads, affiliates, and other online products. Find your niche and get started.

3. Celebrate Your Wins

As you progress in your debt payoff journey, don’t forget to celebrate your wins. You need to always reward yourself for the hard work and discipline that is required to get out of debt.

While you shouldn’t celebrate so big that it increases debt, make sure to factor in little rewards to keep you motivated.

4. Set New Financial Goals

Eventually, with a plan and these steps, you can rid yourself of your debt. Once you do, make sure to celebrate your monumental achievement, but don’t stop there.

Now, you can focus on acquiring wealth and increasing your net worth. Set new financial goals so you have a new target to aim toward. Here’s how to set financial goals and actually meet them.

These could be anything now that you are debt free! Think about where you want to travel, buying your first home, or saving for your future retirement. Just like before, make sure that your goals are specific, measurable, and achievable.

Conclusion

Congrats, you can now set a plan in motion to finally pay off your debt quickly (and hopefully forever)!

Remember, if you want to get out of debt quickly, it’s not always easy. Just like any big goal, there will be sacrifices, challenges, and problems to overcome.

More Tips on Getting out of Debt

Featured photo credit: Pepi Stojanovski via unsplash.com

Reference

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