Stop saying “I can’t afford this” and think about HOW you can afford it
This was my absolute favorite line from the Rich Dad, Poor Dad, and it was right at the beginning.
Robert spoke about the fact that his “Rich dad” would always tell him to focus on how he could save up, invest, and work harder to be able to afford something, as opposed to just writing it off as impossible.
This piece of advice can be applied to anything in life really. I’ve stopped thinking about how impossible it is to become a full time writer, save up for a new car, or move to a new city, and I’ve started focusing on what steps I need to take to reach my goals. This advice has truly changed my outlook on life.
Evaluate how much money you REALLY bring home
This tip might seem a little weak but stick with me for a minute. Going into my current job, I didn’t pay too much attention to my salary number. I had been working a temp job that paid below minimum wage (yes this really happens) up until that point and was just happy to have a full time gig.
It wasn’t until we received a company-wide raise that I realized I was bringing home a LOT less than I had realized.
And when I say a lot, I mean 10–15k less than what I thought. Suddenly it made total sense why I couldn’t afford to save up for a new apartment or travel on my salary. The point is, do yourself a favor and closely evaluate your net income before beating yourself up for not saving up enough.
Create at least 2 separate accounts for expenses
This tip from Chelsea Fagan at the Financial Diet on Youtube has been an absolute Godsend for my personal finances.
I now have 3 accounts that I split my income into.
One checking account for everyday spending, one for rent, and a savings account for money I don’t need to access more than once a month. Although I “see” less of my money from each paycheck, I find that I’m not scrambling to get rent together at the end of each month because it’s already put aside.
Credit cards are both good and bad
I don’t know about you, but I’m mostly lost when it comes to building credit. My parents always preached the evil of credit card companies and instinctively passed that fear down to me. I have built a little bit of credit through other purchases like my car and school loans, but it doesn’t seem like enough.
I spoke with a financial adviser about the importance of credit cards, and she informed me that cards DO NOT automatically help your credit score. It’s the length of time that credit lines are open that matters most. She advised me to get a secure credit card, make small purchases, and eventually raise the limit over time. Oh and NEVER purchase anything on the card that you can’t actually afford.
Decide if you value Financial Independence, Wealth, or both
In Rich Dad Poor Dad, Robert doesn’t spend much time making a distinction between financial independence and acquiring wealth. This, of course, is understandable since he is rich, after all. But for me, the book helped me tap into what I want specifically.
I value the opportunity to one day make a living from writing and production.
I want to make enough money through freelancing that I am able to set my own schedule, and work for causes I truly value like nonprofits and social justice focused organizations. That is financial independence to me, and that is what I want.
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