The Financial Mindset

By: Jason McPherson, Senior Portfolio Advisor Posted:

Developing a mindset that can lead to your financial independence is of great importance. With the right mindset towards your financial well-being, planning and execution will lead to financial success and maybe the only way if you do not inherit the wealth.

The right mindset comes from self-examination, making the right decisions, improving your knowledge and skills, and making your improved lifestyle habitual.

Creating a budget reveals where every dollar is spent. The visual presentation of your actual income sources and expenditures will show you if you are on the route to financial independence or if you will need to adjust your plan. Your budget should also include all the major changes that are taking place in your life.

Avoid Waste

A detailed budget that is compared to actual expenditures will show where corrective actions need to be taken. It is extremely easy in these times to spend on unwanted items and sometimes even getting into debt. With a budget, the money that is being wasted could go towards your financial goals such as starting your emergency fund. This emergency fund is usually an amount set aside for any unforeseen expenses so that the risk of falling into debt is minimized.

Grows Investments

Controlling all our expenses can help to change our mindset towards the value of money. Short and long-term investments can now be made through this effort and what seemed impossible a few months ago before making the budget is now being realized. Investing becomes a high priority and each month, funds can be allocated across each asset class depending on the goals.

Start Now

The best time to change your mindset is now and start by setting realistic and simple goals. As such, try to set aside a specific amount each month for investing instead of saying to yourself that you will invest some money each month. If you are in debt, look at the interest rates and your expected time to pay them off. If you are able, consolidate your debt at a lower interest rate, you should consider this option.

Evaluate how your resolution fits into your budget. If while creating your budget it does not seem possible, consider making some sacrifices immediately to meet the goals you want to achieve. Thereafter, do periodic checks, weekly or monthly, ensuring that your financial resolution is at the forefront of your mind and you are tracking your progress. You can consider seeking assistance from a financial advisor who will be able to guide your investment decisions and keep you accountable.


While changing your mindset about budgeting may require great effort especially in the early months, learning to maintain a budget will pay great dividends. We all want to be financially independent and this can only be achieved with discipline. Let investing become a priority and you can reward yourself occasionally with the interest from your investments. It is important to remember that it’s not how much you earn that allows you to achieve your financial goals, it is how much you consistently invest.