Mastering Money

Mastery is an interesting word, isn’t it? It implies a sense of having everything figured out. Once you’ve attained mastery in an area of your life, what follows is expected to be smooth sailing – no surprises, just a continuous stream of success.

Is this idea of complete mastery unrealistic? Probably. However, the real question is: can you master certain aspects of your life to maximize your freedom and improve your situation? The answer is yes. In fact, striving for mastery in key areas should be a cornerstone of your daily life. And one crucial area to focus on is your finances. Why? Because money has a tremendous influence on your overall health and well-being.

Imagine a life where financial worries don’t dominate your thoughts. Consider the mental bandwidth that would free up. Think about what you could achieve. Maybe you’d channel more energy into creative pursuits, your family, or giving back to your community.

The problem is that money is a complex issue for most people – probably 99% of people. Many struggle with earning too little, spending too much, or not saving enough. I’ve been there, and I understand the struggle. That’s why I want to discuss this important topic and offer some insights on money mastery that I’ve learned from experience.

Like all things in life, the best approach is to start with understanding yourself. What do I mean by this? When it comes to money, it’s crucial to be aware of – and honest about – your spending habits. Every time you’re about to make a purchase, ask yourself: Is this really necessary? This step towards self-awareness allows you to make informed choices.

By critically evaluating your “wants” versus your “needs,” you can start changing your money habits. It’s not that you can’t sometimes buy things you don’t really need. You just need to be aware when you’re doing it and stop yourself from impulsively buying things you really can’t afford.

Once you’ve developed a clearer understanding of your spending habits, the next step is to actively track your purchases. This process is important if you want control over your finances. Here are three key areas to focus on:

Understand where your money goes

Categorize your expenses: utilities, rent/mortgage, groceries, entertainment, and so on. Use budgeting apps or simple spreadsheets to keep track of them. By doing this, you’ll uncover spending patterns and identify areas where you can cut back or optimize. The most timely and best practice is to use an Excel model where you input the data. This forces you to see each transaction a second time and type out the words of the actions you took.

Study your P&L (profit and loss) or PFS (personal financial statement)

Whether it’s for your business or personal life, understanding your P&L or PFS is crucial. These tools provide a snapshot of your financial health. In personal finance, think of it as a detailed budget that includes your income, expenses, assets, and liabilities. Regularly reviewing these statements can help you make more informed financial decisions.

Maximize and leverage debt (especially in business)

For entrepreneurs, understanding how to use debt strategically can be a powerful tool. In business, debt can be leveraged for growth, such as acquiring assets or expanding operations.

In personal finance, excessive debt can be risky, so make sure you manage it smartly. This is where step 1 can really help. Once you understand where your money is flowing and eliminate unnecessary purchases, you can funnel the resources you free up toward paying off debt.

While keeping a close eye on your spending is important, that’s only one side of the financial equation. Sometimes, the problem isn’t your spending – it’s your income. If you find yourself in this situation, here’s my advice: Start talking with people who have already achieved what you want to achieve financially. You might be thinking, why should I talk to people instead of relying on books or college courses?

The problem with relying solely on academic learning is that it doesn’t always address the specific questions you might have. It’s one thing to read about financial strategies in a textbook; it’s entirely different to hear someone explain how they navigated financial challenges and seized opportunities.

That’s why I always suggest seeking out mentors. One short conversation can change your entire life. Someone who’s been there/done that can be an invaluable source of knowledge and inspiration. Just understand that not everyone is comfortable discussing their financial success.

And that’s perfectly alright. If someone is unwilling to talk about their finances, simply thank them and move on. There’s always someone else who may be more open to sharing. So, if you really want to change, seek out mentors, join financial forums, attend workshops, and engage in communities where you can have face-to-face interactions or direct communications with people who have already walked the path you’re on. Remember, the key isn’t just to gather information. You also need to apply it in your life. Practical, experiential learning is what it takes to improve your finances. Most importantly, don’t give up – and never settle. It’s generally best to start by making some action, and adjusting from there.

When we started Carbliss, we were prepared to lose money for the first couple years. And by “prepared,” I mean that we actually prepared to lose money. It was part of our plan. With this understanding, we were able to mitigate our worry over those inevitable losses. We trusted that if we just executed the plan, success would follow.

Similarly, did you know Celsius, that now-famous caffeinated drink, was introduced in 2004? Bet you thought it was a relatively new product because it only recently blew up. The truth is that Celsius has been around for decades, patiently working on their products, listening to their customers, and adjusting to the market.

What happened? They finally made it. It only took them about 15+ years to become an “overnight” success. They made it because they stuck to the plan and never gave up. Just like we did at Carbliss. And just like you can with your own business or personal finances. Apply these ideas, make a plan, don’t give up, and you’ll be on your way to mastering your financial well-being.