4 Vital Strategies To Save, Invest, And Maximize Your Money’s Potential (2024)

You may believe that the answer to all of your money problems is more money. While this may be the case from a certain perspective, making more money might actually amplify the behaviors you’re already exhibiting that causes you to believe that way in the first place.

It’s important to acknowledge from a trauma informed lens that there is only so much budgeting someone can do before they need to increase their income, and that in those instances yes more money is necessary. This is not an article about how you need to stop enjoying your lattes or stick to some fad diet style of minimalism. This is an article however that explores ways you can audit your behaviors, examine what resources you do have, and make impactful decisions with your money.

One of the observations I’ve made in working with many of my high income clients is that there is a theme in how they view their role in relation to friends, family, and peers who may not make as much money as they do. This often leads to feelings of guilt, shame, and survivor's remorse that results in social spending and prioritizing the financial support of others above themselves. In those instances I ask my clients to audit their values and determine whether or not these feelings are rooted in cultural or familial expectations in instances such as “The Black Tax”, or if they are rooted in internal assumptions about what others may think or expect from them. Once I get an understanding of their value system I encourage them to use the following 4 strategies to save, invest, and maximize their money’s potential.

Establish Financial Boundaries

Establishing financial boundaries is not always an easy task due to the assumption that if you’ve got more, you can spend more. While that may be true on paper, what people don’t seem to take into account is that many times with higher income also comes higher expenses. I like to remind my clients in these instances of the famous instructions flight attendants give before take off: “Make sure that your own mask is on first before helping others.” One activity I have my clients do is to verbally practice establishing those boundaries so they can hear and feel what it sounds like. I also encourage them not to stop there but to offer a follow up solution that doesn’t cost them anything. If you can pinpoint the root of the ask, you can deliver on a solution that is more cost effective for you while preserving the relationship.

Establish A Budget

The word budget tends to evoke feelings of anxiety, restriction, and a lack of freedom. I’ve seen some financial professionals cleverly rename a budget to a spending plan. Budgeting can also feel complicated with different styles and tracking methods. Ultimately, a budget provides you with data. It tells you how much income you’re bringing in and how much your expenses are. While there are several popular budgeting styles like zero based budgeting, 50/30/20, and pay yourself first, choosing a budgeting style that fits your needs doesn’t have to be complicated. It’s important to remember that a budget tells you what you can do, not what you can’t.

Establish A System

Establishing a financial system incorporates automation into your finances so that you don’t have to expend energy thinking about when or where you can put money away towards saving, investing, or debt elimination because it’s automatically done for you. Gone are the days where you incur late fees because you forgot to make a payment or you have to choose between happy hour and putting money into your savings account. By establishing a financial system you have greater control over your financial goals and your ability to enjoy what’s left over by establishing small habits that can compound into large results over time whether that’s eliminating debt, increasing your retirement savings, or planning for vacation or the holidays. But establishing a financial system isn’t just about automating your finances. As part of this system you should take time out to regularly review your progress and make adjustments as needed.

Build Your Money Team

Building a money team is going to look different depending on your unique needs and circ*mstances. Your team can consist of:

• Unpaid mentors and role models,
• Pro bono and paid financial professionals,
• Independent courses, books, and conferences,
• And more.

While it’s not necessary to have a team full of licensed or credentialed professionals, there are certain types of advice, specialties, standards, and transactions that these professionals do carry. For example, as a financial therapist and Accredited Financial Counselor® I am not licensed to provide investment advice, only education. There are financial therapists however who carry financial licenses, mental health licenses, both, or neither. It’s important to understand the roles and qualifications of the members of your money team and how they play a part in helping you accomplish your financial goals.

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