(Excerpt taken from Money Radiance)
By Jon Kho
Our view towards money is the key to success in our spending habits and pursuits as it can make us happy or miserable in this area. There are 4 Mentalities with regards to spending money:
Mentality 1
This is when we receive our paycheque from our job or income from our business. We usually allocate it immediately to what we deem as important in our expense column. Then, after satisfying all the needed things to pay for, only then are we able to save on what is left for us. This is good, but the problem with this mindset is that most often, we are not able to save anything because we feel our income is not enough.
Mentality 2
This is when we buy things even before we receive anything from what we worked for. We buy things in credit hoping that our income will be sufficient for us to pay for it. The sad part about this habit is that more often than not, we end up being in debt rather than being able to save because we usually buy things beyond our capacity to pay.
Mentality 3
This is when we receive our income then apply the concept of paying ourselves first. We allocate a certain percentage for ourselves the moment we receive our monthly due. Afterwards, we use what is left for our monthly expenses. What happens in this scenario is that we are putting ourselves at the top of the expense list and making ourselves a valuable monthly expenditure.
Mentality 4
This is when we uphold the third mentality and scale it up to make the savings be more useful and productive to us. Here, we engage our income to provide for us passively. What happens is that when we follow the third mentality, the money saved then can go to an instrument that can create more money for us. This means that while we are actively working for money, some parts of our money are also quietly working hard to create more funds for later disposal in life.
The 4 Mentalities
Looking at the 4 Mentalities will help us value more who we are and what we can do with what is given to us. It is not about how much money we have but how much we value ourselves and let our money grow in time for us.
