To properly understand how you can become financially free, you should get familiar with your own financial behaviors and money perspective. These behaviors are often a product of past experiences, therefore, it is important that you understand how those past experiences are impacting your choices today.
Financial self-image is not your whole personality but an important part of it. There are two steps toward understanding financial self-image. The first one is self-analysis of your current attitudes and practices in the way you manage your money. This will involve reflecting on some of the issues raised by this process. Some helpful questions to ask yourself include:
- How do I value my self-worth in terms of my ability to earn a good living and achieve a reasonable degree of wealth?
- To what extent do I recognize my ability to set and hold to good priorities in spending choices if I choose to?
- How much of a priority have I given in the past to savings for retirement, emergencies, and other important personal needs?
- Do I make financial choices based on what I really think is reasonable and best for myself or do I let others have more influence on my decisions than I should?
- What changes do I need to make in my thinking in order to become a better manager of my money?
- Am I willing to recognize my choice of financial attitudes/habits as a more important responsibility than I have made it in the past.
The second step is to learn how to escape the inadequacies of the past and encourage positive progress in the future. Measuring the current financial status is important only as it helps you plan for a desired financial future. To outperform your current financial status, you must change your financial self-image. This step is a continuous process throughout the duration of your life, but a very important step to take.
For this step, you should start a financial journal and record a personal story of your own thoughts, decisions, successes and failures in managing your money. You will want to add to it over time. This technique is very likely to become a key tool in helping you increase your rate of success. It has proven helpful in many other areas of life such as weight loss and career advancement. It will also work for your finances, sometimes with dramatic results.
Financial Decisions & Responsibility
Every choice made has consequences but financial decisions can lead to more severe consequences than many other decision types. For that reason it is essential to understand how to be a smart financial decision maker. If you choose to spend more than you make, you will end up in financial chaos. However, if you choose to save even a little every month you can eventually end up with a great deal of wealth.
Dennis Waitley, author of The Psychology of Winning, wrote, “There are two primary choices in life: to accept conditions as they exist, or accept the responsibility for changing them.”
A financially intelligent person is smart enough to avoid the blame game and rather takes responsibility for the outcome. This not only shows leadership, but it also empowers you to make change. If you blame your results on circumstances or on someone else, then you are no longer in control and become powerless to make the changes necessary to overcome the obstacle. However, if you take responsibility for the outcome, then you will be empowered to make the changes necessary to achieve the results you desire.
Think about your own attitudes toward responsibility for your choices. How can you think smarter and making the kind of choices that lead to financial success.
Understanding Your Money Memories
Many financial behaviors are greatly influenced by past experiences with money over the years, but especially during early childhood. Early experiences can often shape your life more than most people think.
Ask yourself how you interpreted these experiences as a child and how you see them now. As you see how past experiences have lead you to think and behave in certain ways, make a list. Reflect on how money memories are affecting your money attitudes and habits now.
Don’t judge good or bad. Just try to understand your financial thinking and behavior. When you discover a thinking pattern that is not helpful, you can create a new memory by consciously acting contrary to it. This will help you learn to think differently for a better result.
Once you understand yourself and your money memory, you can explore possibilities for changing money attitudes and money habits where needed. You can eliminate harmful thinking and reinforce those traits that are positive and helpful.
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