financial freedom

7 ways to create a positive money mindset shift

October 12, 2020

Do you feel like you will never be able to get out of debt? Or that you will never have enough money to save for a long term financial goal?

Do you wish you could change that feeling?

Having a negative money mindset by saying ‘I’ll never get out of debt’ or ‘I can’t pay more than the minimum’ can be limiting your ability to reach financial freedom without you even realizing what you are doing.

Making a money mindset shift can help move you forward so you don’t feel like you are treading water anymore.

I will walk you through seven ways you can shift toward a positive money mindset, which will ultimately help you to move toward financial freedom.

what is a money mindset?

The current money mindset you have revolves around your beliefs about your money, how you spend money, and thoughts on your financial future.

Your money mindset will influence the decisions you make with your money.

Even if you haven’t heard of a money mindset, you still have one because your previous decisions and thoughts about money come from somewhere.

Read on to learn how you can make small changes to be more positive. Having a positive money mindset is key to believing you can succeed with whatever goals you want to set for yourself.

your current money mindset is probably influenced by the people around you

How do your parents, friends, siblings, or others in your life deal with money? This can have a profound and lasting impact on the decisions you make with money.

The takeaway is that while you may have been influenced by others, you can consciously choose to make a change. The past does not have to define you. Use this opportunity to gain awareness and embrace a change.

look to others in your life for inspiration

A very motivating and inspiring story came from a goal my brother had set for himself in January 2020. An ambitious goal, but one he still set for himself: make $10,000 in 2020 from side income.

How was he planning to do this? He told me he wasn’t sure when he wrote it down, but it was something he planned to do. After writing this goal down, he came up with a good idea. But then COVID hit and it shifted the ability for him to achieve that plan.

Then a couple of months later, he put another idea into action. Fast forward to September 2020 and he has already met that goal by more than triple. With an online side hustle. What?!

I honestly believe that a significant factor in driving his success to meet his goal well in advance is that he knew he could achieve it. Think about that again: in January he literally had no idea how he would achieve this goal but wanted to find a way…and he did. When his original plan didn’t work out, he didn’t give up. Instead, he shifted and found another path.

My brother and I share many of the same beliefs and positive thinking surrounding our finances and the opportunities to make money. By having a person in my life who thinks the same and I can talk to about our goals, ideas, and plans helps to propel me in the right direction.

You may not have someone in your life who aligns in this way. But that doesn’t mean a change is impossible. Others may see how you are acting differently with your finances and may ask you about what changed and why and how you shifted. How did you make the shift? Well, change how you think using the following seven ways to create a positive money mindset shift.

7 ways you can create a positive money mindset shift

1. be thankful for what you already have

While you may not be where you want to be financially, you still have so much to be thankful for.

Take a minute to appreciate all that you have. Put it in perspective: many people would be in a better position even to be where you are now.

As I accomplish each goal and make progress, I think back and continue to be thankful for the progress I have made.

After I paid off my student loans and was in the process of trying to have my husband’s loans forgiven, I took a moment to pause and think about how just a short time ago I had dreamed about where I was in the process.

It really is powerful to think back like that on each achievement, no matter how small. Try it along your journey and you will realize how far you have come even in the midst of it all.

2. find your why

What motivates you? What is the purpose behind the changes you are making? This is such an important first step when starting your journey to forever financial freedom.

If you don’t have a reason or direction of why you want to make a change, then it will be more difficult to achieve that goal.

Think about your reason why often, especially on the days where you are feeling down and like you are not making progress. This will remind you why are on this journey and why you should not give up.

3. visualize your future

One of the keys to shifting to a positive mindset is by thinking about what you want your future to look like and where you see yourself. By thinking about what you will accomplish, you are showing determination and visualizing that you can do what you have set out to do.

Think about it: if you believe you will never get out of debt or that you can never afford to do something, then your negative and self-fulfilling prophecies will probably turn out to be true.

If you don’t think that you can make a change, then you are setting yourself up for failure by thinking you can’t do it. One of the ways you can help to visualize your future is to set long term goals.

4. be mindful when making new purchases

When it comes to stuff I own or plan to buy, I have switched my mentality to become semi-minimalist.

Becoming a true minimalist is a bit much for my lifestyle with having kids and all. But when I was decluttering and sorting through literally everything, it really hit hard how much you accumulate. I realized that I wasn’t always mindful of what I was buying.

Now, I will think about if I really need something and how often I will use it. This not only makes my home less cluttered, but I’ve definitely saved money by not buying extra stuff.

I did finally buy dressers for our room that were exactly what I wanted. But I waited to find exactly what I was looking for instead of just buying something new. The dressers we had for years that were given to us for free from family were fine, but it was time for a change and I spent the money meaningfully.

Being mindful is not only for big purchases. Even smaller purchases can add up both with cost and turning into clutter. I’ve definitely bought smaller items in the past because it looked cute or seemed like a good deal, but then didn’t really end up using!

5. pay attention to your money

The only way to change your money mindset is to know where it’s going.

Having a budget and really looking into where you are spending your money gives you an idea of where you can cut back on spending. By looking at your current habits, you can see what is essential and where you can make some cuts.

I’m definitely not a fan of completely depriving yourself of joys in life while making a financial change. But…do you really need to get coffee to-go every morning? Can you cut back on one of the subscription services you use if two are pretty similar? One size does not fit all. You need to find what works best for you.

Checking in on your budget can also be important. My husband and I try to sit down together weekly to do a quick overview of our spending so far for the month. Sometimes it’s just me, but I like to sit down with him as often as possible to make sure we are on the same page and so we both know where we are at for the week with our spending.

If you have a partner, I suggest opening the door to discuss your finances. If you haven’t already, make a plan to create a budget together and then meet regularly to review the status. When we have not checked on things regularly, that is when we usually get off track.

6. don’t let your financial past determine your financial future

So you were only paying the minimum amount on your debt or you missed a payment or two. Just because you made mistakes in the past, does not mean you will continue to make the same mistakes.

Use what happened in the past as a learning opportunity and move forward.

By thinking differently and make a change, you can move on and don’t have to keep repeating the same choices over and over again. Your past does not define you or your future. Let that sink in.

Do not let yourself or others dictate the direction of your financial future by thinking you can’t change…because you can. And the first step to change your money mindset to be more positive is by believing that you can.

7. understand your current thoughts about money and your finances to find your limiting factor

What is holding you back? When you think about spending money, saving, or paying off debt, what comes to mind?

Ask yourself these questions:

Do you believe that you can get out of debt?
Do you feel you will be able to save enough for your future?
Are you confident/comfortable with the spending habits you have?
Do you feel you have control over where you are spending money?

If you felt unsure or uneasy answering any of those questions, then you have found the limiting factor in how you currently perceive money and finances. By finding what is holding you back, you know where to start when deciding where to make a change.

make the shift

Now that you have the tools you need to make a money mindset shift, put them into action! I truly believe that if you change your thinking surrounding money, you can set out on a path you might have previously thought could not be possible.

financial goals status update: 2nd quarter 2020

August 1, 2020

Since the second quarter of the year has come to an end, I wanted to keep myself on track with our financial goals and provide a status update. And some lessons learned along the way. Is it just me or is 2020 feeling like both the longest and quickest year (pretty sure April had 100 days alone)!?

I know how lucky my husband and I have been to still be employed during this difficult time and it is not something we take for granted. And because we still have our jobs, we have been able to keep the same financial goals.

If one of us had lost our job, then we might have had to pivot a bit to what our goals would be at that current moment in time. Whatever your situation is, you can and should change your goals as needed. Sometimes life happens.

short-term financial goals status updates

maximize roth ira 2019 contributions: complete

Kind of embarrassed to say that we did not prioritize this while in 2019, which was partially because of finishing paying off student loan debt.

Big mistake! The good news? You have until the end of the tax deadline to contribute to your previous year’s contribution amount.

And thanks to a global pandemic, it was extended until July, which gave us the perfect opportunity to actually set out to do what we had planned, which was to max out those contributions.

The bonus? Your taxable income is lowered, which hopefully with various investments and whatnot puts you in a lower tax bracket.

maximize roth ira 2020 contributions: on track

While we technically still have about 9 months to reach this goal, we discussed that the sooner we do this the better.

Why? With the market appearing to be on the upswing, we have the potential to make more on our return on investment if we put the money in sooner than later.

From the money we have already put into the Roth IRA from the 2019 contributions in the past couple of months, we have already seen some gains!

Obviously, this can change given what is happening in the world around us, but it’s nice to see your money growing.

maximize my employer 401k for 2020: on track

This is something we have talked about, but have not actually planned to do until this year. While I have always contributed more than the bare minimum that would give you that employer match, we have not really been in a financial position to max it out.

Why? Oh, I don’t know, student loans (are you sick of me talking about this yet?!). As you can see, this has had a HUGE impact on the financial decisions we have made and not in a good way.

Now that student loan debt is behind us, we are able to plan for financial goals that will benefit us in the future. Not that paying our loans off or having them forgiven didn’t benefit us, but it wasn’t our choice to make that a priority goal. If we hadn’t, then we would be so so much further behind. Not to mention the added stress they added to our lives.

Anyways, now that the tangent is over….alllllll the reasons why we couldn’t max our contributions: student loans, car payments, daycare (oh yea, those kids are not cheap and that has definitely slowed down some progress), and a mortgage.

Why am I not maximizing this quickly as we plan with the Roth IRA contributions? Because I want to get that employer match each month. And if I don’t contribute in any given pay period to that goal, well… I’m flushing free money down the toilet. Let that be a lesson! Try to space out your 401k contributions throughout the year can ensure your employer matches everything you should get by contributing. Knowing how your employer sets up their 401K match is important to look up!

pay off 2nd car by summer 2021: on track

We could take all of our extra money and throw it at this debt…but we’re not. Wait, what? Why would someone keep a debt longer than they need to?!

Bottom line: having a low interest rate. With an interest rate just over 2% (thank you, good credit!), there is no reason to take that money and pay off the car. We have a higher return on investment focusing on our other financial goals (read: maximizing Roth IRA and 401K).

While we are not going crazy with how much we allocate here each month, we are at least taking what would have gone to paying our other car (since that is now paid off!) and put it toward this goal. This effectively is doubling how much we pay each month.

As much as I want to just pay it off ASAP, I am being patient and sticking with the plan.

Why is this goal so important?

My husband and I have talked about it and are on the same page: we plan to keep our current cars as long as possible to maximize not having a car payment.

I cannot wait until we have all of that extra money that does not need to pay off this type of debt.

Someone once said to me “you will always have a car payment.” And it shook me to my core. How is that possible? For the majority of Americans that own cars, I believe that statement to be true. People either lease or upgrade their cars after a few years, which leads to this perpetual cycle of always having a car payment.

I knew that when I heard that, I was not going to be one of those people. Being on the same wavelength as my husband with our finances has made things so much easier in our marriage.

The question is: if you have a reliable, fuel-efficient car that you have always taken care of, why would you willingly trade it in to just go back to square one with a new car?

I think part of the mentality I have about owning a car is based on what my parents did. Could they have upgraded their vehicles on the regular? Sure, but they didn’t. My dad has the same type of car that I do and his car has over 180,000 miles and he is finally upgrading.

His car is at least 13 years old and while he could have gotten a new car many many years ago, he didn’t. He kept what he had for quite a while and then did some research before getting a new car.

Bottom line: I’m putting all that extra money I will save to other financial goals and you can too! Keep your car for as long as you safely can and you too can save thousands of dollars.

reduce monthly food spending by 30%: work in progress

Honestly, the one category where my husband and I struggle, like really struggle, is with our food budget.

I hate to admit this being a dietitian and all. But really, what does that have to do with being a dietitian….we all have our struggles and this one is pretty common!

During the beginning of the month, it always seems like we are on track, then life gets in the way. Next thing I know, we have spent an outrageous amount of money on groceries, restaurants/take-out, and alcohol. What are we spending money on at the grocery store?!

We are working on:

sticking to our meal plan for the week
consistently using what we already have in the pantry or freezer
not eating out as much

I’ll keep you posted on our progress as this is a new goal we plan to really focus on. We plan to maintain lower spending in this category once we reach this goal.

While we are on track (or have completed) four out of five goals, this is the one financial goal where we need to really work on it because there is so much variability in our monthly food budget. I know that I’m not alone in struggling with this budget category.

I will be sharing the strategies we use to reduce spending in this category. We will see how much progress is made with the next quarterly goal report.

always keep moving forward

I’m not going to add a 5th goal even though the 2019 Roth IRA contribution goal is complete and instead will focus on the other 4 goals. After my quarter three status update, I will most likely re-evaluate and create an additional financial goal.

What financial goals have you recently accomplished?

why you need clear financial goals (and how to make them!)

July 30, 2020

If you want to come up with a real plan for getting out of debt or financial freedom, you need some long term financial goals and short term financial goals!

So, once you envision your life to be without debt and you know where your debt stands, where to go next? Make some financial goals! Okay, okay definitely not as exciting as it sounds, but so necessary to truly track your progress and where you plan to go.

what are financial goals?

Financial goals will give you a better direction of how you are going to be spending (or saving) your hard-earned money.

Of course, everyone wants to get out of debt or go on vacation, but how you will actually do that is why you need clear financial goals. Writing out financial goals can help you to clearly see what your vision is and help keep you on track.

long term financial goals

Long term financial goals are important because they will help you reach forever financial freedom. When making long term financial goals, I like to have more of a broad goal (but sometimes I use the SMART format…more on that later). Short term goals are where you will get into the nitty-gritty.

Some long term goals I am trying to reach with the financial decisions I have been making:

Be debt-free
Pay off my mortgage in less than 15 years.
Forever financial freedom

You might ask why I have two debts listed separately. The debt of my mortgage is a different type of debt than the other debts I had or have. Lemme tell you…the second I walked off that car lot, my car immediately dropped in value. Now our home, on the other hand, has done nothing but increase in value since we did some upgrades.

Not sure where to start? Well, you already did- go back to your why! By revisiting the direction you want to go, you have already found your foundation. Use that as a jumping-off point.

Goals are so individualized to your specific situation that it really wouldn’t be helpful for me to list off a bunch of “good” goals because what makes sense for me might not make sense for you!

gain perspective

When I first started paying off my student loans, I was just paying the minimum with the hope of being able to pay them off and move on with my life.

What I didn’t do was take the time that was needed to think about how I would pay them off and by when. Using student loans as an example: if you are paying the set monthly payment and have a standard loan repayment plan, then it will take you 10 YEARS and most likely a ton of interest.

When I finally realized by only paying the minimum monthly payment, which was over $800/month, I would have paid at least 25K in interest. I had to come up with a better plan. With any type of debt, if you are just paying the minimum amount owed each month, you are going to be paying way more in interest over the lifetime of the debt and it will take you that much longer to actually pay it off.

Just saying that your goal is to payoff debt is not enough

Since paying off my student loans was the first financial goal I had set for myself, I did not do this, but I wished I had a more concrete goal…and then I would have been better prepared to set up a concrete plan.

That is why now I have a plan in place for each financial goal that we set.

enter smart goals

As cliche and overdone as they are, SMART goals are the most straightforward way to make sure your goal is the best it can be. What is a SMART goal? Specific. Measurable. Attainable. Relevant. Timely.

Specific: Which specific category are you targeting? If it’s debt, look back to your list you created of each and every debt you have to get started. But goals aren’t just for debt; create goals for saving money, setting aside money for retirement, etc!
Measurable: You picked which category you are going to focus on, now this is the amount dedicated to measuring your progress. How much will you payoff or save?
Attainable: If you say you are going to payoff $20,000 in 6 months, can you actually do that or that more of an idealistic goal? If it’s not possible, then do not set yourself up for failure!
Relevant: Is this something you actually want to focus on right now? Are you truly ready and able to take the steps necessary to achieve this goal? If not, maybe focus on other financial goals first.
Timely: By when? Yeah, of course, you want to pay off debt, but by setting a deadline, then you can know when you will say byeeee and move on to the next financial goal you want to reach. Again, when picking the time-frame, don’t choose something that is impossible!

don’t forget about short term financial goals

Long term goals are important and will help set the direction of your finances. But…short term goals (and re-evaluating your progress) are important to help reach those long term goals!

Since I’m a dietitian, I deal with people who want to lose weight. But…when they tell me their weight loss goals, they focus on the bigger picture and say I want to lose 50 pounds. While that might be a great long term goal, it is overwhelming! When you see you have only lost three pounds, you are still so far away from reaching your bigger goal. But this shouldn’t feel like you are still so far away. The same thing applies to financial goals. Break. It. Down.

Now when I break down short term goals, the amount of time it might take to achieve could range from a month to a few years-it’s all relative!

I like to think of short term financial goals as bite-sized pieces to help achieve those long term goals. Back to the weight loss analogy: if you think of that weight loss in five-pound increments, then those initial three pounds lost feels more significant. And you have almost reached your first short term goal.

Depending on the type of goal you are trying to achieve, I like to put short term goals in terms of either monthly, quarterly, or yearly time-frames. Much more achievable. Use the SMART goal format I mentioned to set specifics for what you want to achieve!

Want to know where I’m at? Read about my first quarterly financial goals update!

To get your finances in order, take it step by step

By completing each step in order, you are well on your way! Why am I mentioning this? Well, the next step after creating your financial goals is to set up your budget to make it happen.

What is a financial goal you are going to set for yourself?

How to get started on your debt payoff plan with a free debt tracker spreadsheet

July 19, 2020

To get started on your journey to payoff debt and have financial freedom, you have to start somewhere.

After you find your why, the most important step is something that many people overlook as they try to get out of the weeds. Take a step back and look at the bigger picture by actually tracking your debt using a debt tracker spreadsheet.

How much debt do you actually have? Can you answer that simple question with an exact amount? No? Don’t worry, at one point I couldn’t either, and then I realized I needed to take control over the largest source of stress in my life and finally get out of debt.

start with a debt tracker worksheet

Back it up…how do I know you have debt? Because I did, and most millennials do thanks to *drum roll please* student loans. Because of those student loans, you might also have other debt too. If it’s not student loan debt, the majority of Americans have other debts like credit cards or car payments. Some types of debt are better than others, but debt is debt.

I know how hard it is to suck it up and look at what your total balance is. Between my husband and me, we had a whopping 140K+ of student loan debt. The only upside? At least it was because of two undergrad and three grad degrees between the two of us, so we got some bang for our buck, but still!

You can’t start on this journey to financial freedom until you know how big of a hole you need to dig yourself out of. It can be very eye-opening to see the total number in front of you. And exactly what you need to move forward.

Don’t panic

No matter how high your debt is, you will want to take a step back and break it down into chunks. Rome wasn’t built in a day as the saying goes (okay, okay…I think I’ve used enough puns/metaphors/whatever for one post!). But you can’t break it down if you don’t even know what you are dealing with.

Once I was able to lay everything out on the table and see what I was up against, I was able to come up with a solid plan to chip away at that mountain of debt.

When I graduated from college and started making payments, I put my student loan debt on auto payment and let it be, which was a huge mistake! My monthly payment was over $800/month. I didn’t pay extra and I didn’t check to see how much was going to principal vs. interest.

I waited way too long to really look at this and as I continued to pay such a high amount each month, I finally took a step back. It was shocking, disheartening, and much needed to see how much was truly going toward principal.

Spoiler alert! Not nearly as much as I had thought and my balance was not really going down that much, but I had turned a blind eye to what was really happening. Learn from my mistakes.

Then I started to come up with a plan to pay off this debt ASAP! I realized that before I could come up with a plan, I had to know where to start. Once I had that figured out, in less than three years from starting to pay my loans off, they were gone and a huge hurdle and stressor was removed from my life forever.

It’s more than just writing down the total debt

To be able to come up with a plan, you also need to include more details about those debts to make a plan. That other info on your debt tracker? Interest rate, minimum monthly payment, and, most importantly, which debt is going to be your number one priority.

I suggest re-doing the debt tracker spreadsheet each time you pay off a debt or a group of debts (ie. student loans) to re-assess how much you owe and to re-evaluate your financial motivation for the next step. You might realize that your why may have shifted and that’s okay, but

It’s so important to know not only how much you owe, but how much of your paycheck is going toward debt each month. And when you can see which interest rate is the highest..well, you know where to start on your debt avalanche.

Not sure how to format this? No worries, I have your back 🙂 Download your free debt tracker spreadsheet below to get started!

Financial Motivation: What is Your Why?

July 13, 2020

Every two weeks you get paid… and then bills are due and your balance inevitably goes down. You feel like you are on an endless cycle of paying the minimum balance for each debt you owe. You know you want more: that you want to get out of debt, but you don’t know where to start. Sound familiar?

I feel you. I’ve been where you are now. It can honestly feel hopeless, like you are treading water, making no progress, and have no idea how you can live any differently. But it doesn’t have to be that way.

What is your why?

You know you want to make a change. You know you want better things. This is your breakthrough, the first step on your journey to financial freedom.

The first step to take: finding your financial motivation and answering the question of why?

Dig deep. Why do you want to make a change? What is the financial motivation you have to make this change? How do you envision your life without debt? By answering these questions and continuing to ask yourself ‘why’ until you get to the root of why will help you to be successful as you embark on this journey.

If you don’t have a reason behind why you are doing something, then it is much easier to lose momentum and go back to old habits instead of continuing on the path to change.

It’s important you have a reason, such as a financial motivation, behind what you are doing. If you start to become discouraged, then you have something to think back on and keep you on track.

Write it down

When I started my financial freedom journey, I did not necessarily sit down and answer this question. I think that by not writing down my motivation behind getting out of debt that it took longer to focus on accomplishing what I really wanted. Just knowing I wanted to pay off my student loans and be debt-free wasn’t enough.

My motivations (that I should have written down!) were:

to have extra income to save for the future
to be able to have money to spend on items we needed or wanted

It took until 2019 (once all student loans were paid off or forgiven) for me to feel comfortable spending a decent amount of money on dressers for our bedroom! For so long we used dressers that had been given to us to save money because it was something that we could wait to purchase.

We finally upgraded our bedroom and now have a fully finished room. Well, except I’m still looking for a makeup vanity, but my husband considers it “complete” without that.

I felt no financial worry that we spent that money; it wouldn’t hurt our savings account or be something we could not pay off immediately.

Unpopular opinion: I always use credit cards for large purchases to get the rewards because I know I can pay the balance off each month. I’ll talk about that more later!

Use your financial motivation to drive forward

On the days where you feel like it is impossible to get from where you are to where you want to be, take a minute to look back at what you wrote at the beginning of your journey.

Remember that it’s okay to be a work in progress and it will take some time to get where you want to be. Don’t fall for the catchy ‘get out of debt fast’ schemes that might pop up along the way.

There were so many times while I was mid paying off my student loans that I felt so defeated, that it felt like a never-ending process. Especially in the months where we just didn’t have that much extra to pay toward the loan because some unexpected expense came up–don’t you just love when your brakes or tires need to be replaced?

Instead of giving up when I felt this way, I would think back to why I was working so hard to pay off my debt. I envisioned how that would feel and what it would be. If I wrote it down, then it would have been easier to envision because I already would have thought it through!

Next comes the important part of starting your journey to financial freedom. How much debt do you actually have? Read this post about using a debt tracker spreadsheet, which also conveniently includes a place to write down your financial motivation.

What is your financial motivation for getting out of debt?