Rational financial decisions are the pillars of financial success. To achieve this, one must be familiar with the concept of Behavioral Economics.
Behavioral Economics focuses on the psychological and economic reasons why people make irrational decisions from time to time. Understanding this can help you “rewire” your brain and help you have a better understanding of how you could earn money faster.
Knowing what triggers your irrational decisions can help you change, do more positive financial actions, and hopefully make you more money.
With this in mind, how can you know if you need “rewiring” to form better financial habits?
You could ask yourself these following questions to have a better grasp as to where you are in terms of financial status:
- Am I debt-free?
- Am I financially independent?
- Is my money spent on the things that truly matter to me?
- Am I hitting my current goals?
- Am I financially stable?
- Am I content with how much I earn?
If you answered “no” to these questions, you probably need to form better financial habits to help you achieve monetary liberty.
To help you in this process, here are six steps that could rewire your brain:
Decide That You Want To Change
Awareness is the first step to change. Being aware that your financial habits should change to earn more money could help you focus your energy on the right financial actions.
You might be focusing your energy on the wrong job or hustle, which doesn’t even pay well. Instead, you should be aware of your setbacks in earning more money and decide your subsequent actions.
You should mentally choose to dedicate yourself entirely to this process, whether for a brief moment or a more extended period.
Recognize Your Negative Financial Habits
Accepting negative habits could help you better understand what triggers it, whether psychological or economic, and adjust from there. Breaking the cycle of negative patterns enables you to be one step closer to achieving your goals.
Create A Goal
Once you have recognized your negative habits, it’s now time to set your goals. Do the math and get clear on the amount you want to achieve, whether per week, month, or year.
Knowing how much you should earn helps you stay focused and motivate you to make more money. Plans can also indicate if you are acquiring the right amount of money you want to achieve.
There are several ways that you can help yourself keep track of your goal. For one, you can track your expenses by having an invoice system for every amount that goes in and out.
Determine The Actions Needed To Attain Your Goals
Now that you have your goals, how are you going to achieve them? Deciding and writing down your interventions helps in creating a clear path to your goals. For example, you could write down how much you should be earning in every side hustle, spending every day, and other financial activities.
This could help you set your budget for the day and stay on track towards your goal. Furthermore, you should steer clear on what triggers your negative financial actions. You can also think of different income ideas to help boost your earnings.
Have A Sharp And Positive Mindset
You now know your goals and how to achieve them. Now, the hardest part is doing it. To help you have a sharp mindset, visualizing and manifesting your success can be done, among others. It helps you mentally rehearse yourself to achieve your financial goals and keeps you motivated until the end.
Staying positive, despite some setbacks, can assist you in focusing your energy on your desired outcome. Having the opposite mindset can hinder you from achieving your success; hence, you should try to keep yourself in a positive environment to help you maintain a positive attitude.
Track Your Progress
How would you determine if you are achieving your goals? You measure them. Tracking your progress helps you stay on course and ensure that your actual and targeted results are not far from each other. If you have a business, generate a pay stub for bookkeeping purposes.
Something like an invoice can help make tracking your progress easier. Creating these documents can help you see how much money you are spending and determine if you are earning a reasonable amount for your hustle. It also acts as proof for owners to ensure that there are no discrepancies and they are gaining the amount of money they ideally should be achieving.
Final Words: Behavioral Economics
If you can follow these six steps and stay motivated until the end, it can help you earn money faster. Having a clear mind and goal assists you in making more rational choices financially. Initially, this process may start as a struggle, but you would eventually build momentum and become second nature to you as you continue doing it.