First Steps of How to Live Rich

What does a “Rich Life” mean to you? Freedom, choices, travel, purpose, giving back, abundance? No one can answer this question but you. Think about your answer as you continue to read this article.

Talking about money can be stressful. Maybe you feel overwhelmed, confused, or guilty. Are your finances really in the best order they could be in? How many times have you thought about sticking to a budget, getting ready to invest, or doing a financial overhaul but you never actually took action?

Making and following through on a financial plan may not feel like something you need to do right this minute. It may seem like steps you need to take closer to retirement. Our minds are really good at coming up with excuses, explanations, and ways to avoid thinking about topics that feel uncomfortable or unpleasant – things that might cause us a little anxiety, stress or frustration.

This is not a useful habit though because one of the keys to managing your money so that you can meet your financial goals is to start early. Many financial tools grow over time, like your 401K or investments. It’s never too late to start and now is always the best moment to begin.

The psychology of money

As mentioned above, we tend to put off dealing with our money. Our brains may help us to this by distracting us, continually choosing to not focus on it, thinking of reasons why we don’t need to do it right now, and engaging in activities that feel more enjoyable, like drinking a beer, relaxing with your family, or going fishing with a buddy.

When it comes down to working on a financial plan, many of us approach try to overcome our discomfort our dragging our heels by just gritting our teeth. How many times have you thought “If I just try harder, I can save that $100” or “I need to buckle down”? This attitude can be particularly strong in past and present service members because in the military you have to “embrace the suck.”

But how often does that actually work for you? Money is an emotional problem and then we try to approach it with straightforward, logical solutions. We need to acknowledge why dealing with our money can be difficult and find ways to combat our discomfort-avoidance with strategies that actually work for us.

Live rich

Our advice is to take the time to sit down and look at your finances to create an accurate budget. You don’t need to be the smartest person in the world to be rich. You just need to account for all of the money that is coming in and all of the money that is going out – including savings. If you do this, it can enable you to have guilt-free spending. If this sounds intimidating, don’t worry. We have a free 20-minute course to walk you through it!

Once you know how much money you can spend under your budget, you don’t have to feel guilty or try to save on every single purchase. If you’re already cutting back aggressively in some areas where you can, then you’ll have room to spend money on the things you love.

For example, if you love lattes, don’t stop drinking lattes to save money. That’s a big cognitive tax for not a lot of financial savings. Every morning you’ll be craving a latte and spending a lot of your self-control resources to not buy one. Meanwhile, you’ll only be saving a few bucks each day. Instead, choose a few things that you really enjoy and are important to you to spend money on. If lattes are one of them, go for it! Find other areas in your budget to save – that way your money will be working for you and not the other way around.

As long as you’re cutting aggressively somewhere, you don’t need to feel guilty about spending your money. In this way, you can live rich – rich in purpose, happiness, and in enjoying the things that are truly worth the money to you.

Keystone habits

Money has been identified as a keystone habit. There are some areas in our lives that if we change them, it affects almost every area of your life. Health is one such keystone area, and finances is another. Putting in the time and effort to get our finances to be working for us can improve so many areas of our lives. It might be hard and it may take a lot of effort, but the payoff will be huge.

One key to unlocking this keystone habit is to set a clear goal. Decide what you want out of your finances in this season. Do you want to pay down a mortgage or other debt? Are you saving for your children’s education? Are you saving for retirement? Do you want to be able to provide a comfortable lifestyle for your family in the event of your death?

Once you have identified a goal, you can adjust your budget to work towards it. This will look a little different for everyone, but don’t worry – it’s not rocket science! Start with one small step at a time. Remember, just overcoming your hesitation and actually getting started is half the battle. We’ll be coming out with more financial articles soon to help you along the way. If you want even more personalized assistance with your finances, sign up for ADU LIVE, our 21-day sprint course where you’ll get hands-on assistance and advice from financial experts. Don’t hesitate to start creating your bigger financial future today!