Think, act, feel about money the way wealthy people do
Seven principles open the doors to financial wellbeing
THE importance of budgeting, based on knowing how much you earn and where it goes, is essential in the journey to financial wellness.
Sorting your finances out in the same way as you would run a small business can help you to find out where you’re leaking money, say international speakers and entrepreneurs Michael and Robbie Mathews.
When the husband and wife duo, authors of Financially Speaking: The Best Improvement Starts with Self-Improvement, scrutinised their budget, they discovered that in seven months they had spent about $7 000 (about R90 000) on eating out. A balance sheet helped them understand where their “income was coming from and debt was going”.
Robbie says: “If you don’t know where you are financially, you don’t know where you’re going.”
And this need not be a struggle. Using a financial planner to examine your lifestyle and put together a financial plan suitable to your needs and means is vital.
The couple have identified seven elements — what they call wealthy principles — that they believe are the secret to creating wealth. A wealthy mindset Michael says it is important to think, act and feel about money the way wealthy people do, which includes dedicating time and energy to becoming financially literate. The couple emphasise the importance of using books and online education portals to learn about all aspects of financial management, including investing. Entrepreneurship “You will not get wealthy working a 9-5 job” and so it’s important to explore your entrepreneurial side. Asset management “In the same way that it’s important to build business credit, we must also build good personal credit,” says Michael. This means it is important to know the extent of your personal debt, to pay it off as soon as possible and then stay out of debt. “Know your credit and know your numbers,” he says. Leave a legacy The couple say it is critical that you teach your children how to manage their finances.
Let that be your legacy. “Teach your children sound financial habits so that they can be independent. This is how you can create generational wealth — by passing on healthy financial lessons to your children that they’ve watched you cultivate,” they say.
And be open with children about family finances.
“Also, learn how to create legal entities such as wills, trusts and foundations to protect what you’ve built and pass it on to future generations,” says Robbie. Too many parents die and leave nothing behind, putting families under unnecessary stress. Tithing The couple believe that giving back to your community or to a cause close to your heart is key to a healthy, profitable life. Healthy living There is no “point in accumulating wealth if you’re unhealthy”, says Robbie.
Eating the right food, getting regular exercise and going to your doctor for regular check-ups should be included in your financial plan.
“Your health affects your money. If you end up having to buy blood pressure medication instead of buying food, then your health is getting in the way of your financial wellness,” she says.
You are in control
Identify your goal. “We all have a destiny that we want to fulfil,” says Michael.