The difference between people that are wealthy and those that are poor is their perspective toward money. The wealthy think about their money and the poor mostly worry about their money. Wealthy persons engage in more proactive and constructive thoughts about how to earn more, keep more, and spend less of it, whereas the poor generally worry about not having enough of it or where they'll get more.
To be able to develop your wealth mindset, you’ve first got to start at the foundation of what your thoughts are about money.
Here are five steps you can take towards a wealth mindset and actual wealth:
1. Handle Your Finances
Most people live paycheck to paycheck and many barely have anything in checking and savings accounts.
What this highlights is that most people don’t manage their money to safeguard their future. Your financial future depends on how you handle your finances at present
When was the last time you made a budget, when was the last time you listed your expenses and your income. On a piece of paper list out all your expenses such as your Rent/mortgage, Car payments Credit card bills, Groceries, Utility bills etc Try to include all the monthly expenses you may have.
Then write down your monthly income from your day job and any other revenue streams.
When you add up all your expenses and minus it from your income. How much do you have left? Let's hope what’s left isn't all that you have in your bank account.
Think of all the things you spend your money on... Clothes, Entertainment. Wealthy people know how much they spend and how much they have in the bank. Evaluating your finances can be a harsh truth to face but you can’t take control of your finances if you don’t know what shape it’s in.
A tool you can use is an Expense Tracker there is a great one from Ineta Em you can look for it in your App / Play Store
2. Spend Less
Now that you have an idea where you're hemorrhaging money, figure out how you can stop or curb the spending. The very simple reason you want to spend less is so you can have more.
At the beginning of this article, you read that the difference between wealthy people and poor ones is that the wealthy think about money, whereas the poor worry about it. Well, here is another difference: Wealthy people HAVE more money. It’s not necessarily because they earn more, but it’s definitely because they keep more. According to a 20-year study by Tom Stanley and William Danko (which became the book, The Millionaire Next Door), wealthy people save or invest 20% of their income, compared to the five percent or less average for others. By finding ways to keep more and spend less, you will have more money next month than you did this month. (Put it in a savings account, envelope or in the cookie jar.) It adds up.
Make it a game or a challenge. If you eat out a lot, preparing your meals at home can save money every week. Pay off any of your credit card balances. See how much you can save on your electricity bill by making sure no lights or appliances are left on unnecessarily.
3. Eliminate Fees and Automate Your Payments
People who do not have very good control of their money also do not have very good control of their credit card bills. Late payments result in late fees and, sometimes, increased interest rates, both of which eat into your wealth.
One of the best ways to prevent fees and higher interest rates is to automate your bill-paying. Most credit card companies give you the option to create an online account and monthly automatic withdrawal from your checking account to pay bills. If you’re the kind of person who forgets to pay until it’s too late, this is the way to go.
4. Buy for Value
While it’s necessary to reduce expenses, especially when just starting out on your way to wealth, shopping for cheaper, low quality items sometimes end up costing you more in the long run.
Rather than shop for the cheapest, look for the best value.
You can apply this to more your frequent purchases like food and clothing: when a particular food item you use often goes on sale, stock up on it and save future dollars. Cheap attire will wear out faster and need replacement; buying better quality items may cost more up front but you purchase less in the long run.
5. Generate More Income
While a considerable part of wealth consists of saving money and eliminating wasteful spending, you can’t ignore the importance of increasing your income.
It’s said that the average millionaire has seven income streams. That may or may not be true, but one thing is certain: it’s better to have multiple income streams than to have only one.
There are many ways to create additional income streams. Here are some: Learn about the stock market and start investing. Start a home-based business on the side. Sell products through Amazon.com. Write a book and sell it online. Drive for Drop Taxi Service, Uber or a similar service.
When you start thinking in terms of bringing in more money, you will seek out and become more aware of ways to do it. Ideally, you want to find some ways that create income without requiring you to work more hours. Do your research and figure out one new income. Once that is established you can move on to find another and develop that.
Work on these five things and they will get you to think like a wealthy person and you will be on your way to attaining greater wealth.
Check out the video below as Tony Robbins shares some ways to help you condition your mind to wealth.