How To Reshape Your Money Habits To Create Wealth

Posted on October 3, 2016 by Natasha Clark

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Lioness Publisher Natasha Clark.

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Jamie Campbell is a financial advisor with Northwestern Mutual based in Springfield, Massachusetts.

This month I’m talking to money maven Jamie Campbell to learn how we can reshape our money habits to create the wealth we envision in our lives.

Natasha: Jamie, there’s so much to dive into this month. Money habits! Sheesh, where do I begin? Let’s start with people who are doing it right. When it comes to people who are rocking their personal finances, what are some common money habits they share?

Jamie: Nothing like warming the soul than a money habit talk! That may sound sarcastic, but I really do love it! Weird, I know! Good call Natasha. Let’s start about people doing it right. They are aware. They don’t have to know everything about the market or the intimidating investment terms BUT they have at least gone through their own personal budget. And not the list you make in your head, rationalize what you spend, and then move on. Trust me, no judgement because I’ve been there! Ha ha. It’s important to know where your money is going. Scary, I know. For me, finding out how much I actually spend at Starbucks took a few days to sink in. But then I was like, OK, I have to practice what I teach. It doesn’t come naturally to everyone, even me who is in the industry. But I am aware. I took the time to fill out a spread sheet and then stick to it. Those doing it right, are sticking to that budget.

Natasha: I think I am always fascinated with people who can get the most value out of their money. My best friend Sabrina and I always had a running joke when we were kids because she would save her money like a squirrel collecting nuts for the winter, ha ha. She wouldn’t waste her cash on frivolous items and as an adult she has always had a way with money. It doesn’t matter if it’s $10, $100 or $1,000, she can make it last.

For those of us who aren’t inclined with the thrifty gene, what can we do to make sure we are getting the most bang out of our dollars.

Jamie: Nicely done, Sabrina! You go girl! She is one of the lucky ones, not everyone has that discipline with money. For those of us who are better spenders, we need to be intentional with our money. And frankly, realistic as well. It’s like having the New Year’s Resolution to go to the gym six days a week when you haven’t been in a year. The likelihood of holding to it is slim. So give yourself a monthly “allowance” of what you can spend on whatever you’d like. Do not spend more than that allowance. And save the rest of it. Do this for a couple of months and see how that feels. You’ll be motivated to do more when you see that balance growing. Just like when you start losing weight, you get more motivated when you see the change in numbers.

Natasha: Staying on the topic of income for a moment, when you talk to the average person, they always say they want more money – we want raises, additional streams of income – or access to opportunities that will bring about more money. Yet, once they get it, they still have the same spending habits and have nothing to show for the new dollars that have appeared. What should we be doing when new income arrives in our lives?

Jamie: Great questions, Natasha. I see this so often with people that I talk to. What we need to do it switch our thinking of an increased income as more spending money to an increase of income as more money to save. More times than not, our raise doesn’t change the amount that our life costs. I talk to my clients about “what it costs to be them” for the month. Your fixed expenses and your fun money. Earning more generally doesn’t changed the fixed expenses but changes the fun money. What we should do is look at how much our take home income amount increases. Cut that in half and automatically save half.

Natasha: We’re often told that our money habits can begin as early as childhood, because we can develop ideas around money based on how our parents discussed it in the home. Do you think that’s true and, for those of us that need to, how can we reshape our perspectives around money?

Jamie: This one hits home for me. I grew up in a very close family but we didn’t have a lot of money. My parents worked hard but didn’t have much extra. They are spenders. We see things that are on sale and then rationalize that as a reason to buy. I mean after all… it’s HALF OFF! Right? Wrong! We need to save and that skill – yes, I think it’s a skill –  CAN be learned. I am an example, I learned it. I said earlier that the budgeting didn’t come naturally to me at first. But I learned it. It really boils down to a habit is a habit. Doesn’t matter if it’s going to the gym, not drinking coffee at night, or saving money. It takes time, attention, and repetition.

Natasha: OK, Jamie, before I let you go, you HAVE to tell us a money score that you still rave about – like, you scored $600 worth of groceries for $100 thanks to couponing or you managed to get an all-inclusive cruise for half the price. What was one stellar money score that still brings a smile to your lips?

Jamie: Oh, I have a good one! SO, you may notice a slight theme in what I’ve been saying. Well, other than money – ha ha. COFFEE! I love coffee! So much so that I would go to Starbucks several times a week (Sorry Dunkin fans, I still love you). The cheapest coffee I get is $3.15 a pop. For easy math, I will stick with that. Let’s say I went eight times a week. Total coffee expense is $25.20 a week. For 52 weeks a year that’s $1,310.40. YIKES! Let’s recap. My coffee fetish was costing me over a GRAND a year. So my big score was that I bought a fancy espresso machine and milk steamer to make the coffee myself. Total machine cost is $195! All I need now is the milk and coffee beans. For my fellow Costco shoppers, we know how inexpensive milk and coffee beans can be. Now being realistic, I do still go to Starbuck but only about 2 times a week. Two trips a week costs me a yearly amount of … drum roll please…. $327.60! WOO! Plus, of course, my machine cost was about $200. Still about 1/3 the price I was spending! #winning!

Natasha: I love it! I can’t wait to catch back up with you next month where we’ll chat a bit about money decisions that keep on giving on a long-term basis.

Got a money question or topic you’d like Natasha and Jamie to cover? Submit it in the comments section.

About Natasha Clark

Around age eight Natasha Clark was told it was a woman’s job to take care of the home and since then she has built a career out of telling women they can do whatever the hell they want. Founding partner of Lioness, the digital magazine for female entrepreneurs, the former news reporter has created a platform to educate, elevate and support female entrepreneurs. In addition to publishing and hosting events for women, Natasha enjoys spending time with her teenage son, Shaun.

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