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Is your money mindset holding you back?

There are five common negative money mindsets that continually creep into your subconscious, holding you back from true financial freedom. In this article we unearth these beliefs to help you gain awareness and shift them.

1. Fear of failure

Earning and spending from your job is safe. It’s easy. It keeps you in your comfort zone. But what if you could earn more money by setting up an alternative income stream?  What if through smart investing you could really maximise your wealth potential?  Would you do it?

According to recent surveys, if you’re a millennial the chances are slim. Survey results showing that a staggering 70% of millennials would rather keep their savings in cash, instead of investing it.  Consequently, they’re missing out on the power of compound interest because they’re scared of losing the money they have.

We get it. Fear around money is something that may have been ingrained in you since childhood and there are no guarantees when it comes to investing. But by working with a professional financial advisor your chances of failure are greatly reduced, while the benefits of earning more money are increased.

2. Holding out

In the infamous tragicomedy Waiting For Godot, the two main characters spend their days waiting for a man who never arrives, Godot.  The irony of this story is that this scenario plays out in everyday life far more often than we admit to, especially when it comes to money and finances.

How many times have you thought of starting your savings plan, but spent your money instead? Or hold out to win the lottery, get a pay rise or have your investment hit record returns?  What about that inheritance you’ve already spent in your head, are you waiting for that too?

If you’re telling yourself stories that money will come tomorrow – then it’s time to rewrite your script.  The best way to get control of your finances is to start today. Create a budget, work with what you’ve got and slowly start turning your financial future into a positive one.

3. Staying in your comfort zone

If the idea of shopping around for a better electricity/ super/ mortgage/ internet deal gives you hives, there’s two things you need to know. Firstly, you’re not alone and secondly, your inertia is costing you money.

Inertia, or an inability to make change by stepping outside your comfort zone, is a major problem and can have a significant impact on your finances. By staying in your ‘safe zone’, there’s a good chance you’re spending more than you need to and it’s affecting your overall long-term savings.

There is no time like the present.  So rather than procrastinating any longer, why not make today the day that you tackle the things you’ve been putting off to save money. Can’t do it alone? Invest in a financial adviser to keep you accountable in taking small steps towards big savings.

4. Falling for ‘Lifestyle Creep’

Lifestyle creep is the name given to the ‘earn more, spend more’ phenomenon that has financial advisors shaking their heads in concern. For so many people, their spending increases as their income does.

In an ideal world, as your income increases, the percentage of spending and saving would increase too. But lifestyle creep occurs when you spend more but save the same as you were prior to your pay rise, and it definitely has its drawbacks.

For starters, you’re not planning for the future or making your money work for you. If you want a comfortable retirement (hint: we all do), then a plan needs to be put in place decades in advance to get you there. If you’re spending the majority of what you earn now, then what’s going to be left when you can’t work anymore?

Secondly, something mysterious happens when you buy something new – your old stuff suddenly looks old and shabby. Sound familiar?  This is known as the Diderot Effect and it can drain your bank account very, very quickly. Consider yourself warned.

5.  Winging it

Just like any pillar in your life, success comes with planning a course of action. If your current financial plan is just winging it and hoping for the best, it’s time to put something more concrete in place to ensure your goals are met.

If finances aren’t your area of expertise (or interest), then working with a financial planner – especially at the start – can set you on the path to financial freedom.

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Our response to limit the spread of COVID-19

  • As COVID-19 continues to spread, we would like to take a moment to let you know what Financial Spectrum is doing to respond.

    While we haven’t been directly affected with any confirmed cases, we are taking all reasonable precautions to remain safe.Our priorities are:

    1. Keep our staff and clients safe
    2. Stay fully operational in our service delivery and continuing to manage your financial affairs
    3. Play our part in minimising the impact on our community against the spread of COVID-19

    Financial Spectrum has the technology, infrastructure and systems to continue business as usual remotely and our staff will now be working from home.

  • You should notice no change to our service, with the exception that we are encouraging our clients to meet via video call, rather than face to face, unless requested. We will be contacting all clients with meetings booked over the next two weeks with instructions for a video call.This is an evolving situation and we will continue to monitor developments. We will keep you informed of any material changes to our approach.

    These are unprecedented times and we understand that many of you will be feeling unsettled about your finances. We would like to assure you that we are open for business and are here to help you. If you don’t have a meeting booked but would like one, or if you have questions, please contact us at info@financialspectrum.com.au or on
    02 8238 0888

Brenton Tong

Managing Director

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