Financial personality Ramit Sethi regularly talks about money. He normally offers budgeting strategies, advice on how to build wealth, and other insights. However, he took a different path in a recent TikTok video and explained why it’s so important to monitor how you think about money.
“The way we talk about money is so peculiar,” Sethi observed.
He proceeded to share some examples of how people talk about money and how to think of money in a more healthy way.
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Having A Bad Week
Sethi mentioned that some people will say they had a bad week if they spent too much money. He also proceeded to mention the “I have to get good with money” example, which is code for needing to save money to buy a single-family suburban house.
These assertions don’t tell the entire story. He said it’s okay to spend money if you know your numbers and determine you have room in your budget to make those expenses. Most of the language revolves around having to get better or making mistakes, but there aren’t as many healthy conversations about money.
For instance, many people claim that money is the root of all evil. This message comes from the Bible, but it’s been misinterpreted by the people who pedal it. The love of money is the root of all evil, but if you don’t put money on the altar, it’s not evil. Instead, having more money gives you more choices and opportunities in your life.
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Sethi encourages people to pay attention to their thoughts and what they say when talking about money. It can reveal how you feel about money, your ability to get more of it, and what changes you may have to make.
Know Your Numbers
Sethi gives this advice a lot, but it’s hard to blame him. Reviewing your income, monthly investments, and expenses can help you determine if you are on the right track to your long-term financial goals.
If you don’t review your bank account and credit card statements, it’s easier to feel lost when it comes to money. Your language may reflect that if you simply say that you had a bad week or have to get better.
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Determine What Actions You Have To Take
It’s great that you want to get better, but tracking the numbers allows you to quantify what “better” actually means.
Sethi mentions that improving your finances may mean investing 10% to 12% of each paycheck. That way, you can spend money knowing that you have already put some of each paycheck aside for your long-term wealth. Of course, you can boost this number if you want to reach your financial goals sooner. Each person has a different amount they can invest each month, but knowing your numbers is vital for your money goals.
You don’t have to stay on top of your brokerage account to make regular contributions. Sethi suggests setting up automatic portfolio contributions so you never have to worry about it. Automatic transfers into your brokerage account can deduct 10% to 12% of your paycheck before you even have the opportunity to spend it.
Setting aside money for your investments is one step to building wealth. Paying attention to how you speak and think about money can help you determine the next actions you should take.
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This article Ramit Sethi Explains How Our Thoughts And Words About Money Influence Our Wealth: ‘The Way We Talk About Money Is So Peculiar’ originally appeared on Benzinga.com
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