You can call it whatever you want: complacency, small thinking, mental blocks, simply being lost. At one point or another, we've all fallen into the same trap.
“I'm only making $30,000 per year and I can't get out of my student loan debt.”
“I know I need to save more, but I can't find any more money to save each month.”
“I don't know how I'll ever afford to be able to buy a house…”
Have you had these thoughts before? I know I have. In fact, I've had all three of those thoughts before. When I graduated from college, I thought it would take me 10 years to get out of student loan debt (at least). But I was able to do it in two years. I never thought I'd be able to max out my 401k contributions, now I do it every year. The thought of saving a 20% down payment for a house in Southern California seemed way out of reach, until I made it happen.
The truth is, where you're at in life currently is not where you're going to be in 5-10 years. You will grow – both personally and financially. And if you really think hard about what's holding you back financially, you'll start breaking through the mental blocks to saving money.
Mental Blocks To Earning More Money
One of the biggest mental blocks we face financially is the fear of earning more money. This manifests itself in several forms:
- We don't know how to make more money
- We think we're making all that we can make right now
- We don't have any more time to make more money
- We are afraid of becoming greedy
- We are afraid of criticism from our friends and family if we make more than them
Earning more is one of the toughest mental blocks we have to overcome. If I was to tell you that your money-making ability was limitless, you'd laugh in my face and tell me I'm a moron. Why is that your gut response? Because you have a mental block to earning more money.
Each of us has the ability to earn more money, but we have to figure out for ourselves what's holding us back. In 80% of people, the simple thing holding us back is that we just don't think it can be done. We don't know, we think we're maxed, or we think we can't do more to earn more. I know first-hand that every single person reading this sentence right now has the ability to earn an extra $100 per month. It can be done. But will it be done?
Maybe you're thinking to yourself right now, who needs an extra $100 per month? You're right, that's not a lot. It's just $1,200 per year, or $12,000 over the next decade. Or if you start earning $100 more per month today, and do it for the next 40 years, it's only $48,000. That's such a little amount of money, why would you bother? Do you see the mental block right there?
So how do you overcome the mental block of earning more money? It takes a two-pronged approach:
- You have to know you will earn more. It might not happen immediately, but you have to keep your mind open to earning more.
- You have to take actions today that will earn you more.
If you're ready to overcome the block of earning more money, check out our list of over 50 Ways to Earn More Money, or our Earn More Money homepage. Take action. You can earn $20 within an hour today if you work at it.
Mental Blocks To Eliminating Student Loan Debt
What about the mental blocks to paying off your student loan debt? These mental blocks manifest themselves as despair or frustration almost every time. It's the despair of never being able to get out of student loan debt. Or the frustration of thinking “what have I got myself into”. It can be such a nightmare.
The other mental block holding a lot of people back from eliminating their student loans is entitlement. You went to school and got a degree so you're entitled to earn more. You deserve a high paying job. Maybe that's why you were sold on college to begin with. Others may have chosen a “prestigious” university because of the potential to earn more, but you quickly realize that you're over-educated and under-experienced.
Part two of the entitlement mentality is that you don't think you should have to sacrifice your quality of life to pay down your debt. You can keep spending and living life, and your debt should somehow conform to your ability to repay it. That's not the case. Student loans are a mortgage on your personal earning.
I've been helping a coaching client recently break through this mental barrier. She had her student loans in deferment and the first payment was coming due next month – $325. She was afraid and told me multiple times that she couldn't afford that payment. When we fully broke down her budget, she was spending $250 on continuing education she didn't need (but wanted), and hundreds on eating out, drinks, and more. This is where the mettle meets the road, and she had to make the tough choices to pay down her debt, versus continuing to live a life she wanted but really wasn't entitled too.
If you're struggling with student loan debt, you have to break through these mental blocks:
- Just because you got a degree doesn't mean anything
- A student loan is a mortgage on your personal earnings, and that's how you're going to repay it
- Yes, society tells you to go to school, get a degree, and earn more. But they don't tell you to go to an expensive school. They also didn't force you to take out more student loan debt than you can manage.
If you're ready to overcome these mental blocks to saving money on your student loan debt, it's time for you to take action:
- Make sure that you're on the right repayment plan for your student loans. If you can't afford your debt and don't know what repayment plan you should be on, check out our free resources on escaping student loan debt.
- If you're on the best repayment plan you can be, you need to assess your budget. Budgeting is key.
- It's time to make additional payments and earn more to break out of your loans. Read our strategies on earning more money to boost your student loan debt repayments.
Mental Blocks To Saving Money: Think Bigger
One of the biggest traps that I've fallen into is I simply didn't think big enough when I was younger. Hindsight is always 20/20, and looking back, this was my biggest personal mental block.
When I first graduated college, I never thought I could earn six figures per year. Less than a decade out of school, I'm able to do that. When I graduated, I never thought about earning a side income – I honestly didn't know people did this and that I ever could. Today, I earn a significant side income. When I was in debt, I thought it would take years to get debt free. When I was in my first job, I thought I could never afford a house.
All of these mental blocks have a common theme: I just didn't think big enough.
My challenge to you today is to simply think bigger:
- You can earn more (a lot more)
- You can be debt free (and sooner than you think)
- You can afford to buy whatever you want (you just need to earn more)
- You can achieve your financial dreams (but what are you willing to do to make it happen)
This time of year is the perfect time to reflect on your own thinking and beliefs about money. What will you do different going forward?