Money Management: My Biggest 4 Personal Finance Lessons – FastForwardAmy Show Episode 57

Let’s talk about finances!

I know what you’re thinking, “that’s going to be a dry round.”

BUT I promise you; we’re going to have fun. I’ll share 4 finance lessons with you—all very practical—along with some of the books that have influenced me in terms of finances.

It’s no secret that I used to struggle financially. I’ve talked about it on multiple occasions in the past. Long story short, I was broke and living on a very tight budget.

Already as a child, I was obsessed with numbers and finances. I started reading many books, some of them I found online while I borrowed others from my dad.

This obsession with money and finances got me thinking about how I could use that to my advantage. As a result, I set up simple but powerful systems that helped me handle money better even though I didn’t have a lot.

Today, I’m going to be sharing those tips with you to make sure you have money, although you think you don’t.

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#1 Pay yourself first

Years ago, I read this book, The Richest Man in Babylon by George S. Clason. It’s a tiny book, but it left a massive impression on me. The main principle of the book is to pay yourself first.

It talks about running and maintaining your life with 90% of your income, so you can set aside 10% as savings. Even though your income isn’t high, you will still be able to do everything with 90%.

I adopted this principle when I was studying, and it worked! If I made 300 EUR per month, I would set aside 30 EUR. Slow but steady that money would accumulate on an account, and as I started progressing, I increased the number of the transfers. That’s how I went from being broke to saving money.

By setting up an automatic transfer that takes away 10% of your income every month, you can’t accidentally forget about it.

So, instead of looking at how much you can save at the end of the month, start by putting money aside at the beginning of the month, and then you will deal with the 90% that's left the rest of the month.

Setting money aside and thinking about budgets isn’t a form of scarcity. Paying yourself first is a mindset of abundance where you genuinely believe there’s more than enough to set aside money for yourself.

Maybe you're also interested in this: Become a Money Magnet – Crush your Money Mindset and Limiting Money Beliefs.

#2 Put aside 1000 EUR and hide it

Always having a buffer somewhere helps you reset your finances and financial mindset.

When I first heard about this tip, it made a lot of sense because I was already saving money automatically (following the principle from lesson #1).

Therefore, put aside at least 1000 EUR in cash in an envelope somewhere in your house or apartment.

I’ve done this, and it’s small things like these that have helped me reset my mindset to not always feeling like I don’t have money and cultivating a more abundant mindset. Try it yourself, and let me know how it makes you feel!

If something happens or shit hits the fan, you know you’re going to be alright with your cash stash. In business, the advice most people give is to have your overhead set aside for at least three months. BUT privately, it’s also nice to know you have some cash lying around.

#3 Spend your resources on assets

Around the same time I read ‘The Richest Man in Babylon', I also consumed Rich Dad, Poor Dad by Robert Kiyosaki. It’s a great book, and I definitely recommend you check it out.

The book dives into how finances and possessions are a two-way street. There are assets and then there are liabilities.

• Assets put money IN your pockets. Assets give you a return on investment and will earn you money in the long run. Buying stock in a growing company is an example of assets, or buying a studio and renting it out as an Airbnb is another. The main driver is passive revenue.
• Liabilities take money OUT of your pocket. Liabilities will decrease in value over time and cost you money in the long run. Think about a new car. The moment it leaves the garage or showroom, it’s already decreasing in value.

Recap: your possessions are divided into assets and liabilities. Spend your resources on assets as a priority.

#4 Break the cycle of the poor man’s problem

Last but not least, I want to talk to you about the poor man’s problem.

For instance, broke people rely on credits and loans because they can’t afford to buy a product or service as a one-off payment. This way, they end up not only paying for the actual purchase but also for loaning the money. It’s the only option they can afford, and tragically it becomes more expensive, causing even more financial struggles.

If you find yourself in this situation where you keep getting stuck in a short-term cycle with your money, look at what the long-term could be, and if you can break through that by getting a loan or saying no to one thing once, then it’s fine. Whatever will help you step out of the poor man’s problem.

I’ve felt like this in the past, and there’s no shame in that. If you feel stuck in a financial rut, revisit these lessons, educate yourself, read books and articles, and listen to podcasts. There’s a lot of resources out there for free, so you can break that poor man’s problem life cycle.

Let’s recap:

1. Pay yourself first.
2. Put aside 1000 EUR and hide it.
3. Spend your resources on assets.
4. Break the cycle of the poor man’s problem.

You’ve got this!

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Watch this episode on YouTube or listen via iTunes, Spotify, or wherever you get your podcasts, and search for episode 57 of The FastForwardAmy Show.

To help you build up your money mindset, I've created a Money Mindset Guide that teaches you how to

1. Become a money magnet
2. Cultivate a millionaire's money mindset
3. Break negative money beliefs

Download the guide here.

Good luck! Let me know what you think by tagging me in your Instagram stories with @fastforwardamy.

PS. EXCITING news! The Business Freedom Elevator™ early bird doors are opening on January 7th to celebrate one year of the FastForwardAmy Show! Mark your calendar to be the first to sign up and grab a €200 discount and epic bonuses.

Register on the waitlist here: www.fastforwardamy.com/elevator

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