As formal as the term “money management” sounds, it’s a very basic concept: managing your money. Basically, making sure you are in control of what is and isn’t happening with your money. You have a budget that helps you tell your money where to go. You have goals for your money to help you live a life you love. You are in control of your thoughts and actions around money. All easy in theory, but harder to put into practice.
It all starts with your mindset. Do you believe you’re capable of managing your money? Do you think you need more money before you can effectively manage it? You could be causing more harm than you think by letting limiting beliefs dictate your thoughts and actions. My job, as a money coach and financial educator, is to help you take control of your money – starting with your mindset! To help, I’m sharing 6 money management myths to leave behind and let go of!
I’m also hosting an upcoming live masterclass “How to Master Your Money and Budget”. If you need some assistance with that, save your spot now!
6 Money Management Myths to Leave Behind
#1 “I need a financial advisor to manage my money”.
Long gone are the days where everyone needs a financial advisor to manage their money. Most people are building from the ground up, and most financial advisors work with people who already have wealth. That means you have to learn to manage your own money as you’re working to build wealth!
Marc Russell, founder of BetterWallet, shares a similar sentiment on City Girl Savings Podcast episode 107 – Adding Investing to Your Money Goals. He shares that a financial advisor is there to help you prevent things from going terribly wrong with large amounts of money. Until you get to having large amounts of money, you need to learn to manage what you do have and make.
#2 “I only need to manage my money when I make a lot of it.”
In addition to the idea that you need an advisor to manage your money, the idea that you only need to manage money when you have a lot of it should be left behind. This money management myth is false and incredibly misleading. You need to start managing your money NOW! Otherwise, how could you know what to do when you start making more?
I have seen it so many times – people think they can only change their situation when they make more money. Then, they make more money, and their situation gets worse. It’s because you can’t manage $100,000 until you can manage $50,000. Let go of the thought that you don’t make enough money to manage it. If you’re making any amount of money, it needs to be managed…by you!
#3 “I can’t manage my money if I have debt.”
Not always, but often, debt is the result of poor money management, especially credit card debt. Not only does debt mean you need to manage your money better than ever, but it’s also a sign that failing to manage your money is likely what caused the debt to begin with. It’s hard to hear. I know. But I had to tell myself the exact same thing.
If you have debt, you need a money management system that works better than ever. You need to be very careful with managing what’s coming in and going out. That’s the only way you’ll be able to pay your debt down and keep it down.
#4 “My spouse or partner should be the one managing my money.”
Are we in the 1950s? Nope! We’re in the 2020s! If you believe the myth that your partner or spouse should be the one managing your money (and the household’s money), it’s time to get with the times! I’m not saying a partner or spouse can’t manage the household’s money – some people are just better at that than others. I’m saying that YOU also need to know how to manage your money.
If something were to happen to your spouse or partner, you would need to know how to survive without them. Failing to do so could lead you into bad situations. Make it a point to work with your partner or spouse to understand how the money is managed in the household. You don’t have to take over completely, but you should know what to do in their absence.
#5 “I can worry about money management when I’m older.”
I know when you’re young it’s so easy to have a YOLO mentality, but it really doesn’t serve you well with your money. Waiting until you’re older to worry about managing your money will delay any success you have with money. The sooner you can take accountability for your finances, the sooner you can reap the benefits of proper money management.
#6 “I need a formal education to manage my money.”
Anyone and everyone can learn how to manage their money. The myth that you need a formal education to be good with money is a flat-out lie. Sometimes, experience is the best teacher. I have a formal education in finance, and I can honestly say that financial experiences have helped me more than my formal education. I talk more about this in CGS Podcast episode 122 – Financial Education vs Financial Experiences.
Sure, you have to take ownership of learning about ways to manage your money properly, but you’re capable. You just have to put yourself out there and find resources that can help you. Once you accept this fact, you’ll be well on your way to becoming a money management pro!
Related: CGS Podcast Episode 109 – The Major Signs You Need Help Managing Your Money
If you’ve fallen prey to any of the money management myths I shared above, it’s time to break free! We all need to know how to manage our own money. Even if we’re being taken care of by our parents or our partners, knowing how to manage our own money (especially as women) is essential.
Start working to shift your mindset and bridge the knowledge gap to managing your money. You won’t regret it! When you hear “money management”, what comes to mind? Have you had any of these limiting beliefs creep into your mind? Share your thoughts and questions below!
-Raya
The CGS Team
