Blog Post

Financial Success – The Secret

photo credit: Michel Longmire @f7photo

Sometimes it seems like the whole money thing is a big mystery. It comes in one door and slips out the back door and we never see it again.  We think we are earning $$$ ( X amount) each month and then it suddenly seems that there is more month than money. The money didn’t wait until the end of the month to disappear. And on and on it goes month after month like a revolving door.

So we say to ourselves “If only I made $$$$  (more than X amount) each month. Then my money troubles would be resolved. But, is that really true? Does it really depend on how much we make each month or year?

No, it doesn’t.  If you have bad money habits with a little money, you are going to have bad habits with a lot of money. The difference is that the crash hurts a lot more when you take a downswing with lots of money than if you lose with a smaller amount of money. The stakes are higher, the more money you make, but both scenarios can lead you into broke and even bankruptcy.

So, What’s the Secret?

The secret is Financial Literacy. It is understanding and applying the practice of giving yourself a security net so that when the gut shots come and when you get hit hard, you have a something to buffer you so that you don’t crash and burn. Think of the trapeze artists. When they practice and when they perform, they know that there is a net below to catch them when they fall. So, it’s basically the same idea.

Financial literacy is rare in our society. It is certainly was not taught in our schools (maybe it is now, I don’t know).  The banking industry does not stand to profit from a society that is financially literate; they need for people not to understand these basics. It is in their best interest for you to be their asset and your own liability. They depend on you to rack up interest payments on your credit card (s) for things you bought but didn’t have the money to pay for.

What Exactly Is Financial Literacy?

Basically, Financial literacy is having a complete understanding of money. It is the application of financial principles to give yourself protection against financial hardships (like job loss, medical emergencies and other situations that dig into our money bag). Just ss book literacy is the key to opening up many opportunities, so financial literacy opens you up to freedom from debt bondage.

What About Financial Security – What Is That?

Financial security describes a situation where even if you lost your main source of income for a significant amount of time (6 months to a year) or a medical emergency came along, it would not send you into a tailspin or a panic. It would not mean that your current lifestyle would change in any major way. It describes a situation where you have put measures in place to buffet these “forks in the road” and you have time to adjust.

Without Financial literacy and applying the principles of financial literacy, you are simply not going to be able to have financial security. You may have the “appearance” of doing okay, but the backstory of a debt lifestyle will catch up to you. Maybe you are thinking that it is normal to have debt. Everyone has debt, everyone has a mortgage (or two). Maybe you think that being able to live debt-free is (1) unthinkable, (2) not normal and (3) not possible. But have you ever thought about where we got these ideas from in the first place?

A debt lifestyle has not always been an everyday reality. There was a time when people simply did not buy what they did not have the money for -they lived without. We are conditioned to think and live like this. It is ingrained in our society to have a microwave approach to living. Advertising has conditioned us to want “stuff” and get it now. We are conditioned to feel that we deserve what they are selling and to buy it immediately rather than wait until we have saved up for it or rationalized that we don’t actually need it.

Money Will Either Work For You or Against You

Ask yourself the question “Am I waking up poorer or richer each day?” The answer to this question will show you where you are with regards to Financial literacy. The principle of compounding is either working in your favor or it is working against you. For example, if you are accumulating credit card debt, this is an example of how compound interest is working in favor of the banking institution and against you. You may say “Oh but I have a retirement savings plan that pays me interest”  That may be true, but if the credit card interest you owe is higher than the interest you are getting in your plan, you are going backward.

If compound interest is still working against us evidenced by whether we are moving forward or backward financially, we have not yet mastered Financial literacy. You might be saying right now that, with your job and family situation, it is near impossible to get to that point. You might be saying that money is tight and you simply don’t have it (the time is not right). Well, the reality is there never, ever will be a good time. Time does not wait for us to decide or to act. There is a saying that says:

When is the best time to plant a tree? 20 years ago. When is the next best time to plant a tree? Right now!

If you want results, if you want to improve your money situation, if you are just starting out in life or if you are advanced in life:

(1) Begin as soon as possible.

(2) Stick to it, don’t give up and let time work for you.

(3) Be careful who you give your money to. Evaluate fees and services.

Ok, So Where Do I Start?

Sit down and determine what you can do without each month. Be ruthless, but don’t put yourself in the street (so to speak). Where is money being spent wastefully? Are there any habits you could change that could bring down costs?  Groceries are a big-ticket – could you adopt a once a month shopping excursion and bi-monthly cooking plan? Could you thrift shop fo clothes or just find new ways to wear the ones you have? There are many ways to cut back.

photo credit: Jonathan Brinkhorst @jbrinkhorsr

Do you track your spending? Do you know down to the penny (yes, I said “down to the penny“) how much money is going out of the household each week or each month?  Do you keep a ledger to track this spending and do you compare your spending from month to month?  Like I said, getting back on track with your finances requires being ruthless. It requires separating the necessary from the non-necessary.

Do you know how much money is coming in? This is your net salary, not the before taxes salary. Do you make buying decisions based on the actual money coming in or based on what they say your (pre-taxes) salary is?  There is a financial principle which says that we should not spend more than what we receive (living within the limits of our takehome pay). Keep track of this as well. Know how much is coming in and track what is going out and the second should be less than the first.

Last Tip: Invest In Yourself!

One of the biggest “money mistakes’ that people make is that:

They spend when they should be saving and they save when they should be spending.

Your brain is a powerhouse of potential wealth Investing in self-education (apart from traditional and conventional education) is the number one (bar none) that you can do to progressively increase your wealth. Investing in your mind through reading good books (ones that help you to think differently and encourage you to grow), listening to stimulating and empowering audios and getting around people who also desire to improve themselves is the very best way to put yourself on a new path of improvement all around: better career opportunities, promotions, better skills and improved personal and business relationships.

The Takeaway

Making money is not as complicated or as hard as people like to think it is. We have just made it seem complicated. The secret is simple (note: I did not say easy) and effective: follow principles and not emotions. That’s it! Learn to say no to yourself and others. Tune out the advertisers and their megaphones. It’s just nose anyway. Remember who the most important person is: You! Treat yourself as important and invest in yourself, but don’t buy any excuses from yourself.

Cheers to a new start!

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Diana Lynne’s passions are family, travel, self-improvement, pursuing a debt-free/financially free life. She also loves hanging out with family, friends and being with her dog Skye. Diana is a Quebec City girl. who loves living life.  You can connect with her through


This blog post was inspired by:

Financial Fitness (The Offense,  Defense and Playing Field of Personal Finance), Chris Brady & Orrin Woodward, Obstacles press, 2014

This post does not propose to give any financial advice; It is meant for educational purposes only.

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