“I worry about every little penny.”
“I am aware of every bill I pay.”
“I can’t really think long-term right now, when every day I need to really think about how to get by now.”
Sound familiar? It’s common and totally understandable to get caught up in the small details of your finances. Even more so if you do the majority of the bookkeeping for your household or run your own business. And even more so if times are tough.
However, it’s important to remember the bigger picture when it comes to your money. Thinking “bigger” can help you spend money according to your beliefs and reach your financial goals sooner than you think.
Plus, it can help you relieve a lot of stress and guilt that comes from looking only at the day-to-day picture of your money. Sound like something you want in on, but aren’t sure where to start? Keep reading.
SIGNS YOU’RE PLAYING SMALL WITH MONEY
Not sure if you could be thinking bigger with your money? Here are some telltale signs there’s room for improvement.
You’re compromising your values to save a few bucks.
Sometimes being frugal does pay off, but in many cases, cutting corners doesn’t lead to the outcome that you want. Maybe you want to invest in a personal trainer to work on your health, but you can’t get past the fees to hire one. Or maybe you know that you need new tires for your car, but you’re leaning towards buying a secondhand set to save money.
Everyone’s values will look a little different, but you have to decide what’s worth investing in for you. Your health and safety are important, so in the grand scheme of things, spending a little more now on personal training or new tires will be worth it.
You’re unwilling to ask yourself the hard questions.
Do you need to own a house right now? Do you want to go back to school? Do you need two vehicles for your household?
Those are some of the hard questions you have to face in order to think bigger about your money. It’s easy to focus on what the answer should be for your situation now. For example, you may answer “yes” to the first question because your apartment lease is up in a few months, and you’re tired of renting. But are you financially ready to put a down payment on a house or handle maintenance and repairs on your own? Do you want to put down roots in your current city, or are you thinking of moving first?
These hard questions are hard for a reason. They force you to look at the risks and consequences of your decisions. They make you face your financial fears. But they’re necessary if you want to reframe the way you think about money.
You’re terrified of debt and actively trying to avoid it.
If you’re terrified of debt, we understand! Debt is often made out to be this horrifying monster that you have to avoid; once you get trapped in its clutches, you can never escape. But that’s simply not true.
A little fear of debt can help you avoid some financial mistakes that will have lasting consequences, like credit card misuse that leads to a lower credit score and high-interest debt. However, if you’re too fearful of it, it may keep you from spending money in a way that will bring you happiness.
Buying a house or starting your own business are two great examples. If your finances are stable and you’re ready to buy a home or start a company, you shouldn’t deprive yourself of either just because you don’t want to go into debt. Again: bigger picture. Both actions are generally good investments that could benefit you now and in the long run.
A NEW LEVEL OF FINANCIAL AWARENESS
If you resonated with any of the above, you might be wondering: How can I start changing my mindset and start thinking bigger about my money? The most important thing to remember is to be honest with yourself. Be honest about your situation, and be honest with your options.
Feeling stuck on a financial decision? Lay it all out on the table. State the problem, list each possible solution (even the unrealistic ones), and go through the pros and cons of each option.
For example, if you recently graduated college and you need to figure out your housing situation, you might analyze each option like this:
Move back in with the parents.
- Pros: cheaper rent and the ability to save up for the future
- Cons: having less privacy and a longer commute to work.
- Rent a place with roommates.
- Pros: shorter commute to work and more privacy
- Cons: higher rent and more people to live with.
- Buy a condo/townhouse/home.
- Pros: freedom to decorate or renovate, a place to your own, more space.
- Cons: mortgage payments and higher bills.
Writing it out, you might realize that buying your own place is most likely out of the question for you right now, but thinking about that option will put it on your radar for the future. It may even make you realize that it’s your ultimate five or ten year goal. That’s thinking bigger about your money: even if it doesn’t fit now, you have a better idea of where you want your money to go in the future.
START CHANGING YOUR MINDSET NOW
Like any new habit, changing the way you think about money can be difficult. But the sooner you do it, the sooner you can stop sweating the small stuff and start making money choices that align with your values and your long-term goals.
If you need more advice on figuring out your money values, head over to the Everyday Money Resource Library and get started on the values exercise!