Let’s talk about Money, baby.
When I say money, what’s the first feeling that comes to mind? Allow me to give you a summary of the most common feelings about money. Anxiety, because you have debts. Stress, because you are not sure how to make ends meet this month. Jealousy, because your friends have more of it. Frustration, because your boss isn’t giving you enough.
Did you notice what all these feelings have in common? They are bad, negative feelings. Money is a loaded word (pun intended.) For most people, it controls our life. You get it in return for work, and you give it away in exchange for goods or services. But we don’t speak about it, or at least not honestly. Do you truly know what your friends and family make? Do you have any idea what’s in their bank accounts? Do they know those things about you? Probably not. Why do we do that? Why are we so afraid of money?
When I changed my mindset about money, a whole new world opened up for me.
I was just like you, before. My parents weren’t poor, but we weren’t rich either. We had enough to get by and have a few extra’s every now and then. We didn’t take anything for granted, though. My parents worked a lot and we were always mindful of spending money.
Pinch your pennies, that’s how I was raised. Some call me cheap or stingy. And I was, before. Because before I changed my mindset about money, money was something bad for me. I didn’t have enough of it. My paycheck was too low for the work that I was doing. Everything was too expensive. There were so many things I wanted to do, to see, to buy, to have, but they all cost too much money. It was always the money. It controlled my whole life. And if I’m being honest, my financial situation wasn’t even that bad. I had no debts. I earned enough to live well if I watched my expenses a little bit, but I didn’t have to deny myself much. Most months I had enough left over to save. But still, it always felt like I never had enough. The thought of money controlled my life.
And then everything changed. How do you ask? Simple, I educated myself. It’s as easy as that. Once you know something, truly understand it, you can manipulate it. Or to put it more nicely, play with it.
I turned money into a game. Not a gambling game, but a game of control. Instead of the money controlling me, I now controlled the money. I learned about budgeting and minimalism. I got into the FIRE movement and I love this kind of mindset. I set financial goals for myself and smashed them. I am no longer cheap and stingy, but I do live frugally. I only spend money on the things that truly matter to me, not on what society thinks I should spend money on. This way, I could get a good grip on my financial situation and start to play with it. I started to ask myself, what would happen if I decided to save half my paycheck right on the day I got paid? My bills come in the same week as my paycheck, so in this way, I could only spend whatever was left after that. That was my monthly budget. I experimented with investing 250€/month, 500 €/month, and later more than 1.000 €/month. I watched the stock market and I saw my money go up and inevitably go back down on some days. I made spreadsheets and graphs to track my goals, and now I am excited at the end of the month to see how I did.
Okay, maybe I’m making it sound a little bit too easy. The theory, but the reality takes some practice. It takes a strong will and courage to go against the current. Because that is what you will be doing. The normal 9-5 job, go into debt for a nice car and bigger house, or dumping all your money into a savings account is not going to get you to financial freedom. That’s what I (and pretty much everybody else in the world) was doing before I changed everything around. It depends on your own personal situation and also on which part of the world you live in, but let me give you some harsh truths about money:
Money can’t buy happiness, but it can sure make your life easier;
It is highly unlikely your government pension will be enough to get by on;
When you work for someone else, you are making money for that person, not for yourself;
Earning a lot of money does not make you rich, just as earning little money does not make you poor.
What I’m trying to tell you here is that you need to take control of your financial situation. Don’t count on any government assistance of any kind. If it does work out, great. Now you have extra and can live like royalty on your own remote, tropical island, but just assume you won’t get any outside help. Take care of your own finances and make sure you have a safety cushion for any setbacks. How? It’s easier than you think and it all has to do with a magical thing called compound interest. Once you take control over your finances, you stop being controlled by money. You are in charge now, so enjoy it.