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Attitude Adjustment: Change How You Think About Money and Change Your Life

Financial decision making is hard, whether it’s making difficult budgeting or investment decisions or getting out of debt. The way you think about money can radically change your financial habits. Here are some nuggets of financial wisdom to help you evaluate your outlook and increase your earning potential.

What is Money?

Money is often seen a necessary evil: a means to an end which often causes more harm than good. The risk of this view is that it can associate money with stress, greed or shame, making it a greater issue in relationships and keeping people up at night. Money is best viewed as a reward for and a call to creative action. Seeing money as an opportunity rather than a burden can help you exploit it to follow your passion rather than living paycheque to paycheque.

Back to Basics

To make money work for you, you need the right outlook and the right plan. Setting up a financial calendar is a great starting place to ensure you pay your taxes and complete other to-dos on time. It’s worthwhile to keep track of your net worth, including assets and debt to make sure you keep an eye on the big picture and avoid backsliding.

Mind on the Money

Saving and budgeting, with this mindset, are not means to miserliness but long-term wealth and purchasing power builders. Before you get into saving, you should check the interest rates on your loans (especially credit card and other compound interest rates) to help you decide which to pay off first. The earlier you start saving the better. Savings should be included in your monthly budget, organized by direct deposit and put it into a separate savings account to decrease your chances of spending it.

Sustainable Saving

Holding in another bank account is an additional step in avoiding transfers. Credit unions generally offer better loans and interest rates on savings accounts. Decide ahead of time what kind of financial emergencies would justify drawing on savings. Losing work, medical emergencies and major housing or car breakdowns are generally good reasons to draw on funds. If you set up a retirement fund early, there will be more time for it to expand due to compound growth. Just make sure to avoid early withdrawal, as you’ll be penalized for it. It’s wise to increase your retirement savings – along with other savings – proportionally when you get a raise.

Budgeting for Prosperity

The 50/20/30 rule is a good starting plan for budgeting. It allocates 50% of income to essential expenses like housing and groceries, 20% to financial priorities like saving contributions and debt payments and no more than 30% of lifestyle expenses like entertainment and eating out. If you find yourself struggling, try restricting your purchases to cash to give you a better idea of the money you’re spending. If you need to supplement emergency fund payments with small loans in an emergency, use them judiciously.

A good rule of thumb is to start off repaying smaller debts to give you the momentum and confidence to finish off the bigger ones. You should try to reduce mortgage payments to below 30% of your monthly income. Break down your financial goals (e.g. yearly or quarterly goals) into smaller tasks which you can accomplish in a fortnight or month.  Avoid co-signing loans to safeguard your credit rating. When shopping, consider the quality of a product– i.e. the cost per hour of experience – in your cost assessment.

Tricks of the Trade

That was the science of finance, now here’s the art. Repeating spending mantras to yourself at moments of purchase, such as “is this really worth delaying my car purchase?” can be a good psychological reminder. Savor what you have, and what you buy. Getting on top of other healthy habits – like exercise – can give you both the confidence and energy to persevere. Consider partnering up with someone on your financial quest.


If you get into a stable enough situation to afford investments, make sure to rebalance your portfolio regularly (at least yearly), reviewing your broker account and ensure your allocation is matching your investment goals. Make sure your fees aren’t eating into your returns too much, and stick to low-cost index funds if you’re a beginner.

With a proactive mindset and plan, you can begin to make serious headway toward financial independence and success. Always remember that it’s momentum that will keep you on track toward financial success – just like backward momentum drags so many down. Return again and again to the small goals: once you’ve mastered your week you can move on to mastering your month, quarter and year. There’s no place too small to start.

Patrick Herbert is a personal finance and lifestyle coach working to make sure everyone lives a happy, fulfilling life.


  1. It’s so tough to change an attitude because it requires almost *constant* vigilance. I’d also say that an attitude adjustment towards your money habits also requires an adjustment to your lifestyle, choices, and overall attitude as well.

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