As dramatic as it may sound but its the truth our relationship with money can shape our financial destiny for the good or the bad.

Money impacts us in many ways. Becoming financially self aware is a starting point to financial wellbeing and freedom. Companies or individuals laden with unmanageable debt, who’ve been careless with “nothing will happen” attitude and when things go awfully wrong are stuck at the wrong end, of course not everyone’s intention can be questioned but one has to plan and be more judicious, its not free money after all, debt has to be paid back. Reason this with the smart individuals who have an amazing ability to pile on debt and build a fortune and yet be able to pay it back on time.

I have come across several personalities in my career. I will put them in 5 buckets.

THE SAVER : Your motto is to buy everything cheap. You wait for the best discounts. , queue up in a mall or their favourite store if there’s a fire sale. You are conscious to turn off the lights when you leave a room. So if your the saver then start investments mostly in favour of a balanced nature.

THE SPENDER : You love hitting the bar the day the salary is credited. When I was in Oman the malls used to be crowded with expat (foreign) wives every Thursday afternoon and I used to wonder why. I realised that their husbands salaries were paid every week on Thursdays. You enjoy the best latest of everything. Spenders drive themselves from a FOMO (Fear of missing out) and just the joy of spending what they earn. Breaking this loop is hard. So if you’re a spender start investing small monies and make this an habit. This will help rein urges to spend. For heavens sake , don’t live on “Buy now, Pay Later”

THE DEBTOR : Unfortunately, You spend more than what you earn. That means borrowing more and more to sustain spending. You live on credit cards. Someone I knew was in the habit of borrowing at 5% interest per month, this is insane, desperation. This happens because your credit scores are poor and you have no option but to visit what I call the “shark lenders”. You need to start creating a budget and make a list of purchases that are completely avoidable or can be postponed. Save, Save and Save and pay off your debt before you even start investing. You also need to keep working on your skills and performance to keep earning higher every year.

THE IGNORER : You re someone who ignores your personal finance and find it too difficult to deal with the subject. More often than not you have no idea on your finances, this doesn’t mean that you don’t have the money, buts it’s so boring a subject that you want to take it easy. One possible factor is lack of knowledge or anxiety about making choices and taking difficult decisions. The first step is to have the knowledge in becoming aware of how much money is coming in and where is it going, having this knowledge can be the first step in building great habits. The second step is to find a trusted wealth advisor who can fix this for you. And finally….

THE INVESTOR : You have a clear picture of your financial situation and are actively working towards financial independence. You spend far lesser than you earn but more importantly unlike the saver you invest. You love putting money to work. However one caution here is don’t leverage, you may just go from being an investor to a debtor. Investors are in general well off, they have more options for financial choice and freedom. That said if you identify yourself as investor then congratulations you’re on the right track and the benefits should notch up over time.

The key is to know your strengths and your blind spots. Folks who come for advice , I always ask what does money mean to you and what is it about money that gives you sleepless nights. Recogising this will help you understand what stage you are at and ultimately find you a path to better financial outcomes. If you liked this newsletter do share it with your family and friends , you may write to us at info@growthfiniti.com