Are you living paycheck to paycheck, denying yourself everything, can't remember the last time you indulged yourself, and still haven't saved up enough for new python leather boots? Perhaps your approach to money needs a rethink!
Psychology of money
Your relationship with money is directly related to how you perceive the world around you and its resources. From this perspective, there are two main approaches to the perception of resources and finances.
Those who take the first approach believe that the world is a dangerous place. They firmly believe that there will never be enough resources for everyone, constantly worry about the future, and view others as competitors. They either hold on to every penny, fearing loss, or try to take what belongs to others in unethical ways, from petty fraud to outright crime.
People with the second type of thinking are confident that any person can get everything they need from the world through their work, talent, and desire. They treat their surroundings with gratitude and a desire to honestly exchange goods and knowledge.
People in the second category stay away from people in the first category. They know that no matter how much you do for them, you will only get ingratitude, claims, and deceit in return.
Those who are obsessed with saving out of fear, rather than smart planning, often see everything that happens through the distorted lens of resource scarcity. They do not see a healthier way: to think about how to bring maximum benefit to other people, improve their professional qualifications, and receive a decent reward for excellent work.
Why doesn't the “save” method work?
For two reasons.
1. Because your (most likely) average income, even with the strictest savings, will allow you to save only a modest amount, which in itself will not bring a large passive income. Let's say you have saved 50 thousand hryvnias. Even if you are lucky and you invest this amount with a yield of 10% per annum, in a year you will receive 5 thousand hryvnias in dividends. To have a large passive income, you need to invest a huge amount. So, if your only goal is passive income, then only saving small amounts may not be an insufficient strategy for a quick result.
2. Because sometimes a person is overly satisfied with the process of accumulation itself, forgetting about the real goal. For example, you decide to buy a new car or make repairs. You save a little money every month, the amount “for a rainy day” grows, your dream becomes closer. You feel confident, capable of achieving your goals. What is wrong then? The fact is that the pleasure of the process can distract from active actions to accelerate the achievement of the goal. If you do not just save money, but make efforts to achieve this amount as soon as possible, a person begins to take on more responsibility: finds a new job or additional income, implements new ideas at work and receives a bonus for it, asks management for a raise.
You should save if it will benefit you in the long term, or if it will create a financial cushion or help you achieve specific goals. For example, you can tighten your belt while studying for a graduate or master's degree, if a degree will allow you to take off in your career. Or you can sit on pasta while working on a new image project that will bring recognition. Saving is also important for building a reserve fund in case of unforeseen circumstances.
How to “magic” money?
There is a psychological approach according to which the clarity of your desires and readiness to act can dramatically affect your financial capabilities. Have you noticed how it works: as soon as you urgently need funds, you begin to actively look for ways, and they unexpectedly appear? This is not magic, but cognitive refocusing. When the goal is clearly defined, your brain, in particular the reticular formation, begins to work as a filter, separating from the information noise exactly those opportunities that you simply did not notice before. The power of intention through action is what really works.
Formulate a clear and emotionally meaningful goal. Don't just say “I want a car,” but visualize it in detail: the color, the smell of the interior, the feeling of the ride. Such visualization creates a powerful emotional anchor that fuels motivation and keeps you on track.
Set ambitious but achievable goals. If you currently drive a mid-range car, the goal of buying a €1.5 million sports car can be demotivating because it is unattainable. Start with a realistic but significant step forward. Successfully achieving intermediate goals creates positive experiences and strengthens your self-confidence.
Replace fear of failure with a focus on the process and the result. Instead of worrying (“what if it doesn’t work out?”), focus on the positive emotions of future ownership. Imagine yourself enjoying a ride in a new car, taking a selfie with your new iPhone, or traveling with your family. This technique is not just a dream, but a way to tune your psyche to actively search for solutions and maintain a high level of energy for action.
How can savings be harmful?
When you stress out before a long-awaited purchase (saving, calculating, analyzing its necessity), you stop getting pleasure from its purchase. Instead of calculating options for how to get this thing, your brain spends all its energy on overcoming the stress before owning it.
Strict savings, accompanied by internal conflict, can interfere with the positive cycle of motivation and satisfaction. If you want something and beat yourself up for it, accuse yourself of wastefulness, forbid yourself from having it, feel guilty for every purchase, the subconscious understands that desires cause unpleasant emotions. This can lead to a decrease in motivation and the desire to achieve new goals.
“Poverty mode” is activated – you mentally move from the world of abundance to the world of lack of resources. If you train your brain to work in the mode of fulfilling desires, to rejoice in your every “wish” and to look for ways to earn more, this will not happen.
What else isn't working?
The temptation of quick, easy, and unethical money. In the long run, such earnings will leave no trace, and your reputation will be ruined.
Allow yourself more with other people's money, that is, take out a loan, borrow from friends and live beyond your means. There will be no more money in your life – you will instantly be drowning in debt.
What to do?
To get more money, you need to act in three directions simultaneously:
1. Improve your professionalism to choose a company or clients based on your own interest, not necessity. If you don't know how to do anything in demand and useful, but you want to earn a good living, learn new skills that may be in demand. Master another profession or turn your hobby into income.
2. Focus on clients who are able to pay for your services. The market value of services often depends on the solvency of the target audience. Think about the difference in financial reward between services aimed at the mass segment and those aimed at more affluent clients. This allows you to monetize your professionalism more effectively. Choose clients from among affluent and ethical people. Cooperation with such clients can be mutually beneficial and open up more opportunities. Moreover, the word-of-mouth effect will work: they will tell their partners and friends about your merits, and you will get a queue of clients. Get rid of greedy, unethical and eternally dissatisfied clients. They will only take away your time and energy without bringing adequate remuneration.
3. Remove all the tension associated with money: fears, internal blocks, anxiety about the future. Limiting beliefs about money are often deeply rooted in childhood. You probably heard them from your parents or grandmothers as a child: “we are poor, but honest”, “to earn money, you have to work hard”, “what kind of boots do you need, you can't even wear out the old ones” and finally, the trademark “if you want, you will get more!”. You have grown up, and these postulates are still in your head and will not go away on their own until you consciously get rid of them.
