Are You Willing to Change Your Financial Philosophy?

by Miranda Marquit · 4 comments

Over the years, I’ve developed a financial philosophy that works for me. Research for the work I do as a financial freelance writer has provided me with the chance to learn about finances, investing, and more. As I’ve learned more about money, I’ve been able to develop my own philosophy and priorities.

However, I’ve also learned that sometimes it’s important to be flexible in your approach. Being open to new ideas of money can help improve your finances and increase your chances of achieving financial success.

Evolve Your Philosophy

First of all, it makes sense to let your financial philosophy evolve naturally. I started out with the basics, learning about budgeting, and getting out of debt. Then over time, the idea that budgeting and saving were the only things I needed disappeared to be replaced by the idea that I needed to add investing to the mix.

I also began to see that what was important to someone else didn’t need to guide my own financial decisions. While it’s possible to learn from someone else’s choices, the reality is that it doesn’t make sense to just follow what someone else does. You need to figure out what matters to you.

Get ideas from others, and then fine tune them to fit your own life and priorities. Evolving your financial philosophy can be a process that takes years. I know that my current financial philosophy has been more than eight years in the making — and when I hear of new ideas, I’m ready to integrate them into what I already have.

Give Up Ideas That Don’t Work

What’s harder than evolving a financial philosophy over time, however, is giving up ideas that no longer apply to your situation. The conventional wisdom is that it’s always better to buy a home than to pay rent. However, there are times when renting makes more sense, especially if you are considering buying your primary residence.

For quite some time, I’ve been adamant that renting is the course for me. I’ve loved living in an apartment this last year after owning for seven years. It’s been great.

However, after telling anyone who would listen that I never want to buy a home again, I’m stuck in a position in which I might be better off buying a home. The town I’m moving to doesn’t offer viable rental options, so it’s cheaper to buy and pay the mortgage than it is to rent. Now, I’ve had to backpedal and reconsider that particular financial philosophy.

But that’s okay.  There are many money ideas out there that you might need to change if you expect to succeed in the long run. Be patient with yourself and allow space for you to change your mind.

I’ve changed my stance on credit cards (they aren’t evil; they can be tools when used responsibly) as well as my view on buying a car with a loan (I’m okay with it when I’ve got access to super-low interest rates). Backtracking on your stated money beliefs can be embarrassing in some cases. However, the reality is that you need to be ready to change your mind when you end up with new information and new opportunities.

In some cases, your financial philosophy might need a total overhaul in order for you to reach the next level of success. So embrace change and the evolution of your money mindset.

What money ideas have you discarded in the past?

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  • Steven says:

    It’s very important to learn early about how to manage money and in a manner that works for you. Made a lot of foolish mistakes when I was younger and a few more later on. Managing money is something we don’t discuss enough with our kids and I think something that should even be touched upon in schools as kids don’t really take the time to look at the ‘big picture’ until they get in a financial crunch when it’s too late. What do you think about teaching money management in school?

  • Louis says:

    A big change for me was deciding to take all investment risks “on the equity side,” while making sure all fixed income investments were limited to only the most safe, like treasuries, investment grade corp bonds, and TIPS/I Bonds.

    Another was splitting credit cards between cash back and travel point, and being strategic about what to buy under each. My Amex Blue Preferred is used for gas and groceries to maximize cash back, and my CapitalOne travel card is used for everything else to maximize travel points.

  • Very true. The only constant is change, and you need to be ready to change with it. I used to make a lot of purchases in cash, but then I decided that it was easier to track my expenses using credit cards (which I pay in full each month), not to mention getting purchase protection and cash back rewards.

  • Jordan says:

    Great advice here. It’s important to not just change your habits – you have to change the way you think, too, to truly get out of bad financial habits and get good ones. Thanks for sharing your insight!

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