ļ»æOUTLINE
0:00 Introduction and overview of the episode
1:30 Mistake #1: Living beyond your means
4:15 Mistake #2: Neglecting to save for emergencies
7:00 Mistake #3: Failing to invest for the future
10:30 Mistake #4: Ignoring the power of compound interest
13:45 Mistake #5: Not educating yourself about personal finance
17:00 Actionable steps to avoid these mistakes
20:30 Conclusion and final thoughts
THE ERIN DAVIS SHOW
Welcome to the Erin Davis show where we talk all things money, mindset and confidence. I know that being in control of your money means that you can step into the rest of your life with confidence, because everything starts with confidence. But I also know that women carry a huge, invisible mental load when it comes to their money. Being an accountant for over 30 years, I know all the ins and outs when it comes to money, and just how heavy that emotional load can be. So while I love talking about money, for me, it goes so much deeper. While I want you to explore your relationship with money, I also want to show you how embracing connection, expansion and abundance will make you feel more centred, inspired and aligned. So are you ready? Let's get started.
Hello and welcome to another episode today. We're going to be talking about 6 dumb ways to try and get good with your money. And I know first hand that I have tried these in the past, but we are here to talk about how to get good with money. And so if we want to get good with money, then we need to think of different ways to do things from what we've all always done in the past. Now, these six things are very common if you have done them in the past, I don't want you to feel shame or guilt or judge yourself for actually doing them, because they're not terrible, but if you want things to be different, then you need to do things a different way. And I see these things happen all the time. They play out everywhere. And we really need to flip the way that we talk about money and how we think about getting good with money, because there's a real way to do it, and these ways are not the way.
So the first one is ignoring how you feel about money. And if you've been following me, following me for a while, you will know that I am all about the emotions. And if we ignore how we feel about money, how money makes us feel, how we react to it, where it sits in our body, then we are really missing a huge piece to the puzzle. There is so much information out there as to the strategy, as to what you need to do, how you need to do it. And if it was that simple, we would all just go and do it, and we would be so good with money. But it's the stories and the beliefs that we hold about ourselves and then also about money, which are stopping us from actually putting all of those things into place. So the mindset piece in relation to money, particularly around our feelings and our emotions actually really underpins everything we do. And this is the same in all areas of our life, the mindset will either be you think you can or you think you can't. You're right. And I'm sure you've heard that saying before in the past. It's very common, but it is so true. And if you are trying to get good with money and you ignore how you feel, how it makes you feel, how you react to it internally, and focus on all of the external things, then you are missing a piece of the puzzle. And while you might be good with money for a short term, I guarantee you that it is not going to stick, and it is not going to have long, lasting positive impacts and positive changes.
So the second part is waiting for more money. And if you want to get good with money, you may think that, well, I don't have enough. I can't start yet. I'll just wait until I get some more and then I'll be able to do it. The best time to start to get good with your money is yesterday. The next best time is today. And so taking that imperfect action right now is so much better than not taking any action at all. I want you to learn and grow and refine, evolve, change, adapt as you go, rather than sticking your head in the sand waiting for that right time, waiting for more money to come into your life before you actually start to try and get good with money. And as they say, if you can't manage $1,000 you're not going to manage $10,000 so it doesn't matter how much you have, it doesn't matter where you are in the journey. You just need to start now. So don't wait to have more in order to get good with it, because you're going to carry through the same thoughts, feelings, beliefs, systems and processes that you always have. And so why not start now and start to get better with your money from where you are right now.
The next one is listening to people who think the same as you. And this could be really tricky, because if you are only surrounded by people who work in the same environment as you, experience the same things with money and have had the same upbringing. They tend to have a very set mindset. It's not looking for opportunities, it's not looking for growth, it's not looking for a different way to do things. So it's super important to put yourself in a situation where you are exposed to different ideas, different thoughts, different ways of doing things that challenge the way you see things, then it's up to you to decide whether it is for you to try or not to try, but actually just being exposed to these different ideas allows you to witness what the possibilities are. You know, when you put yourself in a group of people that are earning so much more than you or doing so many things different to you, they think differently. They do things differently. And if you are wanting to get good with money. You need to put yourself in a place where you can see other people who are good with money. It will then show you what the possibilities are. And this can be really triggering for some people, so you need to be open to it. But I like to think of it as an opportunity to learn and grow. You know, what are these people doing that I'm not doing? What can I learn from them? How are they showing up? What are their processes? What are their thoughts, what are their behaviours and actions? What are they actually doing that I'm not doing? And so a dumb way to get good with money is to stay in the same circle. Stay in the same place, talk to the same people. Never open yourself up to different ideas or different possibilities, because you're just going to stay where you are.
So that is a super dumb way if you think you're going to get good with money, the next one is relying on credit as free money. And I think this really comes down to the instant gratification that we live in at the moment, the society we live in that everything is instant. We don't have the same mentality as our parents when they were growing up, that we have to save for things. We have to work towards things. Everything is so accessible now we just tap our card, we instantly get it. There's really no pain from paying for things at the checkout or in the online shopping cart. It's just instant. We just do it. And when you can start to remove that instant gratification and that free feeling like that instant, yes, I can have it. I can have whatever I want now it doesn't matter where I'm at. Then you can start to change your relationship with money. Using credit as a way to fund your lifestyle really puts you into a false sense of financial security. As I said, it fuels that instant gratification. And the problem with credit is the interest is so high. You know, the afterpay scenario is that people are paying everything on afterpay, even their groceries. And then when they get paid, all of their pay goes to making the payments on afterpay. So instead of working out what you need to spend, what you can spend, they just go and spend on everything, because they need it now. And it is very, it gets you caught up in a cycle of, I have to have it now, and it is really hard to get out of so if you want to get good with money, you need to not rely on credit as that free source of money, because it is not free. We know it's going to come back and bite you in the arse eventually, because the interest is so high, it puts you into that cycle. And it is really, really hard to get out of. It's not impossible to get out of, but it takes discipline and it takes hard work. And so if you want to get good with money, steer clear of those credit cards. Steer clear of the Buy Now pay later things because they are putting you into that false sense of security.
The next one is investing without a clear plan or investing in trends. Now I see this a lot, particularly around maybe crypto or Bitcoin, people just get so caught up in the whole hype of it, but they have no clue and they don't understand it. For me, personally I don't go down the crypto path because it frightens me. To be honest, I haven't spent the time to research it and understand it. And for me, I wouldn't be able to sleep at night if I invested. And while I can't give financial advice because I'm not a financial planner, I see it in my accounting world that people are losing a lot of money because they invest in things that they don't understand. And so if you are trying to beat the market. I just get really, really nervous when I hear people doing that, it's about time in the market, not timing the market. You really need to understand the risk and reward connection. And it's about understanding what you're investing in those sectors that you know you have no idea about are really quite dangerous.
And if you are investing money that you could be spending elsewhere, and you don't have a lot to spare, that financial stress and burden is really heavy. And so I really want you to take a step back and think about, well, what is the overall plan? What is what is it that we want, rather than just making an off the cuff investment that you don't know anything about, and that's where you need to speak to a financial planner, speak to your accountant, speak to people who know this stuff and can provide the advice and create the plan for you. And if you're not prepared to invest with a plan, then maybe investing is not for you. And so if you want to get good with money, it's about investing in things that you understand and trusting the process staying in there for the long term, or if your investment plan is short term gains, you know fully understanding that risk and reward connection it is so important. And if you want to get good with money, go into it with a very open mind and a very good understanding of what you're actually getting yourself into. The
amount of losses that I see coming through with crypto is huge. And look given there are some people that have made massive gains from crypto, but I also see so many on the other side that have lost a lot of money and have lost.
And the last one is splurging to reward yourself for doing such a great job with sticking to your budget. And this can seem a little bit strange, because if you are getting good with money, you then have the ability to choose where you spend your money and what you spend it on. But if you are in that restriction phase, and then you reward yourself for doing something. It reinforces that binge mentality, binge and restrict. You know, similar to that yo yo dieting space, that you have that deprivation and then indulgence. And if you are wanting to get good with money, I would suggest that you have a very clear plan as to how you spend your money, what it looks like for you, and how you need to, how you budget, how you manage it. It can really undo all of your hard work when you spend in this splurging type of way, because you can then feel really guilty for spending your hard earned work, which then puts you back into that cycle of shame and guilt as you were before, and it can really stop you from developing a healthy positive relationship with money. And so if you want to get good with money, I would suggest that rewarding yourself for doing a good job and budgeting and sticking to your budget is actually a really dumb way to get good with your money and I just want you to be able to keep that even keel.
Getting good with money can be boring. It can be dull, but it is really about taking those small, consistent, one percenter action steps that you need to do all the time that are not super fun at times. Let me tell you yet, when you start to see the momentum and when you start to see that building, then that provides the motivation to keep going. And so if you want to spend and reward yourself, that's fine, but just have it built into your budget. Be very clear as to what that looks like, what the set, the parameters of what's acceptable, what's not acceptable. Remember that we don't want to be spending out of emotion. We want to be spending according to the plan. Does it suit the values? Does it fit with everything that we're doing? Does it really align with where we're at? And if it does, then that's great. But if you want to get good with money, definitely splurging to reward yourself for sticking to the budget is not a good way to get good with money. It is actually a dumb way. So they are my 6 dumb ways to get good with money. And if, as I said at the beginning, if you do them, have done them in the past, don't beat yourself up. Don't be hard on yourself. It is all about learning, growing, evolving, changing, adapting to have a different outcome. And so the first part of getting good with money is really the awareness piece, looking at what you are doing, what your reality is right now, then setting your expectations as to where to go from here. How do we move forward? But these ways, if you are just relying on these ways, then they are actually Dumb ways to get good with money, and I would suggest a different approach. Hope you've enjoyed this episode. Let me know if it resonates. Send me a message. Connect with me so that I can hear about it. I love hearing about everybody's relationship with money, how they feel, and it just encourages me to keep going with this. So please sing out, let me know, and I will see you next week.
Thanks for tuning in today. I really hope you enjoyed the show. If you did, head over and subscribe and also leave me a review while you're there. I would love to read it. Don't forget to share this episode with your audience and tag me on Instagram @erindavismoney. If you need any more info from today's show, head over to www.erindavis.com.au/podcast , where you'll find all of today's show notes and links. See you next week on the Erin Davis show.