The Money Perspective That Could Set You Financially Free

Yes, spending can be a good thing. How you allocate your money today will help determine your future financial success.

I am not simply talking about how much money you make. By slightly changing how you think about and use your money, you can begin to create greater abundance in your life. You will feel happier, more satisfied, and more at peace with your financial decisions.

To begin, pretend that you know nothing about money. All you need to understand is that by going to work each day, you generate income for yourself and your family. The important question is: What will you do with that income?

There are two basic approaches to managing your money.

The first approach is to earn money and spend it as financial needs arise. You receive your income and use it to pay for your mortgage or rent, car loans, student loans, insurance, food, gasoline, clothing, entertainment, and other expenses.

With this approach, you may have very little money left at the end of the month. The cycle continues because you do very little to change how your money is being used.

If you have a new child or experience another major lifestyle change, meeting your financial obligations may become even more difficult.

The second approach begins when you receive your paycheck and pause to consider all the possibilities before you.

Imagine that you are living rent-free and have very few financial obligations. What would you do with the money you just received? Whether it is $1,000, $5,000, or $10,000, would you save it, invest in yourself, or spend it all?

With this approach, you intentionally allocate your money in ways that can improve your quality of life.

For example, suppose your goal is to own a business. You could allocate your money, time, and energy toward gaining experience and learning more about the industry you want to enter. You might complete additional training or work for a company within that industry.

Every dollar you use toward that goal can help prepare you to succeed in your own business.

Even if the business does not work out, the experience and knowledge you gain can be invaluable when pursuing your next opportunity. 

The more you learn about operating a business, the wiser and more resourceful you can become. That knowledge can help you make better decisions in the future.

Use your resources to create meaningful experiences, pursue your goals, and live your life to the fullest.

This way of thinking can be applied to nearly every area of your personal finances.

Instead of feeling depressed or stressed when reviewing your financial situation, look at it as an opportunity to learn and improve.

For example, suppose you eat at restaurants frequently because you know very little about cooking. Eating out regularly may cost a significant amount of money without improving your overall quality of life.

You could instead spend some of your time and money on cooking classes. Learning how to prepare meals can help you develop better habits, eat healthier, and save money.

Preparing and sharing meals with your loved ones can also strengthen your relationships, create lasting memories, and leave you with more money in your bank account.

You can plan how to use your limited resources—your energy, time, and money—to help create long-term financial success.

A comprehensive financial plan should consider the income you may earn throughout your working years and into retirement. It should also account for your current lifestyle and future expenses to reduce the risk of running out of money.

Having this information available allows you to identify the areas of your financial life that need improvement. You can then make better use of your money and avoid serious financial mistakes.

The more you learn, the more effectively you can use your financial resources. Improving the way you manage your energy, time, and money can help you build a more secure and abundant life.

Where do you start? Start your financial plan today for free. Download your free plan here. 

Art De La Rosa
Financial Planner and CEO of Wealthy Dollar
USC Graduate and Author