Your Financial Success Is Largely Based On How You Manage Your Money
The single most important difference between financial success and financial failure is how you manage money.
Mastering money management is what allows you to create financial freedom — and with that freedom comes the ability to do what you want with your time, instead of being driven by the need to work just to stay afloat.
Most of us dream of achieving financial freedom — that moment when we don’t have to worry about how we’re going to pay the bills or make rent, when all our basic needs are provided for.
But financial freedom can only happen when there’s enough money left to set aside for whatever we desire, whether that’s paying off debt, recreation, or a long vacation. And at the end of the day, that’s what we’re all aiming for.
Everybody I’ve ever talked to wants to be financially free. I’ve never met anybody that doesn’t want that. But financial freedom isn’t possible unless you master managing your money wellusing key strategies to help you get to financial freedom and build long-term wealth.
In order to really manage our money well, read on to discover a few key principles to keep in mind…
1. If You Can Manage A Little Bit Of Money, You Can Manage A Lot
No matter where I am in the world, if I’m talking about money, I always get the same question: “Harv, I don’t have a lot of money, in fact, I don’t have any extra, so how do I manage it?”
To answer that question, I share a very simple analogy:
Imagine that you had a certain amount of money and you went to the grocery store once a week. Let’s say you spend $200 at the grocery store to buy your food for the week. When you get home at noon, you decide to have lunch. Are you gonna eat all of the food? Of course you’re not going to eat all the food in one sitting — you bought it for the whole week! Instead, you’re going to manage it so that it lasts you the entire week. Yes or yes?
The same principle applies when it comes to your money:
You’ve got to manage your money and manage it properly so that it lasts.
Here’s the thing, no matter how much income you do have coming in, you’ve got to manage it. And here’s why:
We are creatures of habit.
So if you are not in the habit of managing your money, when you start having MORE money coming in, guess what’s going to happen? You’re still not going to manage your money. And it’s all going to disappear, and you’ll be left wondering why you just can’t seem to do well financially — let alone get rich!
So even if you have $1 in income, you need to learn how to manage that $1. And if you can do that, you will strengthen the habit of money management.
At my Millionaire Mind Intensive course, and in part of my book, “Secrets of the Millionaire Mind“, I teach a very effective money management method— designed specifically to get you to financial freedom.
It’s called the JARS money management system.
Basically, using this system, you split your money up into six different accounts, and you have percentages of your income to put into each account. You can use bank accounts or actual jars and divide any income you receive into the jars (or accounts) using these percentages as a guide.
Here’s a FREE worksheet that will help you calculate how much of your income to put into the 6 jars.
As you work toward financial freedom, you have to master the habit of money management.
Money management is the key building block of financial success, whether you’re just starting out or you’re a millionaire, because the habit is way more important than the amount.
Let me say that again…
The habit of managing your money is way more important than the amount.
So, before you try to do anything else, it’s time to take control of your money. When you master your money, you’ll be putting yourself on the fast track to wealth and success.
Money management is the key building block of financial success, whether you’re just starting out or you’re a millionaire, because the habit is way more important than the amount. When you master your money, you’ll… CLICK TO TWEET
2. Earn More Money By Solving More Problems
Once you’ve mastered the habit of managing your money, your goal should be to maximize what you can earn.
When I was younger, I wanted to earn as much money as fast as I could. I tried every business venture I could get my hands on. And no matter how hard I tried, I just couldn’t make any business work.
And the primary reason for that was that I was focused only on myself making money and not focused on helping others!
In fact, I believe most business success comes down to one factor, and one factor only: whether your business focuses on solving problems for other people.
It doesn’t matter whether it’s a big problem or a small problem. And you don’t have to be smart, unique, good-looking, or have some special or unusual skill to be massively successful.
All you need is a product or service that solves problems for others.
Think about it like this…
If you solve a problem for one person, you earn one money
If you solve a problem for some people, you earn some money.
If you solve a problem for lots of people, you earn lots of money.
What do you spend your hard earned money on every month? I’m sure you’ll see lots of products and services for solving your problems and making your life easier. True or true?
When you focus on solving problems for as many people as you can, money is the natural result.
3. Make Your Money Work For You
I often come across students with a chunk of savings or high income who want to know how to really maximize their money. For them, and for you today, I have some advice.
Many people believe that you should either get rich quickly OR work until you retire to become financially free.
But being rich doesn’t necessarily mean you’re financially free, a misconception believed by 95% of people. And you don’t have to work tireless hours and wait to retire to enjoy financial freedom!
If you’re not experiencing financial freedom right now, it’s not because you’ve done anything wrong. Like most people, you probably just haven’t mastered the art investing or creating passive income — money you earn, whether you’re actively working or not.
The goal is to make your money work for you — instead of YOU working for your money — by creating systems of investments or passive income that will result in ongoing cash flow.
Opportunities to create passive income include investments like bank and government bonds, corporate bonds, t-bills, or rental property income. You can also focus on creating a business that generates passive income.
Be sure to build a business that has the potential to be systemized so that it can work without you. That way, money will continue to flow in, whether you’re putting in the hours or not.