You could probably guess the basics of what a money mentor does; they help you make money, right? Well, yes, but they do a lot more than that. A good money mentor works with you to improve either your personal financial position, your business finances, or both.
If what they do were that easy, you would already be doing it and your business wouldn’t need the help. Sure, you could read all the tips like our Basic Money Management Guide for Small Business. But going it alone is a slow burn and it’s easy to get off track. Having a mentor to help you unpack where your mindset needs rewiring and guiding you on the process of transforming your relationship to money and how you manage it ensures that you build your future financial health on a stable foundation.
So, what is a money mentor?
In broader terms, a money mentor is like a life coach, but for your money. They encourage your money to work to its true potential. They give you the skills you need to be able to do this for yourself.
A financial planner is someone with an excellent understanding of finance, cashflow management, taxation and is someone who can assess your position, showing you ways to improve it.
A money mentor is a little different. Their goal is not to increase your money, but to increase your knowledge about money, and improve your attitude towards it.
Your first money mentor was likely your parents. Think back to when you first learnt about money.
- Did your parents give you money, or did you have to work for it?
- What did they teach you about banking and saving?
- Did they make you put your own money toward bigger purchases?
- Were you told that you couldn’t have some things because they were too expensive?
- Did they make you get a job outside the home?
- And what can you remember about their personal spending habits?
Your first patterns were shaped here, and your current relationship with money would have started from what you saw and modelled as a child. It’s possible your parents taught you a healthy dose of fear too. Such as getting into too much debt, and this was probably a very good thing.
Whatever your first relationship with money was, if you want to turn it around now, you certainly can. It’s never too late to get your money into shape.
There are three basic ways to improve your personal financial situation:
- Reduce your debt
- Save what you can and invest it well
- Bring in more money
The skills you need to do this are knowledge and confidence. The ways in which we get into trouble with money come from either not knowing enough, or having a poor emotional response to money. These two things are what a money mentor can help you with.
Think about how money makes you feel.
- Does it raise your fears and anxiety?
- Are you overwhelmed by the idea of how you much you owe?
- Are you nervous about understanding ‘adult’ topics like life insurance, investment in shares, or superannuation?
- Do you feel giddy whenever you have it and just want to spend?
- Or, are you serious and have a relationship of mutual respect?
Mentoring can help you look at how money makes you feel, and then help you work out ways to improve this, and put you back in control of these feelings.
Things a money mentor may be able to guide you with:
- Reviewing your current credit cards and loans, and finding out if there are better ones you should be using
- Working out ways to pay off your debts, and then learning not to rely on them so heavily in the future, if that has been a problem for you
- How to learn from your mistakes
- How to establish a budget and live within your means
- Smarter shopping with self-control, research and the courage to bargain
- Understanding how interest works, on debts, on savings and on mortgages
- How to think big picture, and plan for the future
- How to start saving
- Where to best put your savings, and how to help them grow.
How can a Money Mentor help with your business?
So far, we’ve talked mainly on personal banking and finance, which often shapes how you approach financial management in business.
So how can a money mentor assist your business? It starts a similar way; by increasing your knowledge and your courage with finances.
A mentor is a teacher; someone who tells you about their own experience and what they learned from it. They can give you advice as to what they would do in your position.
They work through guidance, encouragement and support.
It is usually a relationship of respect; if you don’t agree with this person’s philosophies and business ethics, then they may not be the right mentor for you. You need to be inspired by this person. They can talk at you until the cows come home, but if you don’t believe what they say or feel inspired to take positive action because of it, then the mentoring situation could be better. Look for someone whose business acumen, personal strength and interpersonal skills you admire.
A lot of small businesses are terrible at making money, not because their specific product or service is bad, but because they are bad at managing the money side of things. There are about a trillion ways you can save, spend or generate money better in business, and if you choose the right mentor, they will be able to guide you to success in this.
Some businesses work very well in the now, but are not good at looking to the future. Your money mentor will look at your past, to learn how you got here. Your present, to see what is coming in and how you can do this better. The future, to plan and grow.
Ultimately you need to emerge from the partnership better educated and inspired to move forward.
That being said, you don’t need to put a close date on the mentoring relationship; as you continue to do business and new challenges arise, your mentor can continue to help you. Their experience will be growing as well, and there will always be some words of wisdom to impart. Ideally you will both gain from this mutual give and take.
If you would like to know how Think Big can assist you to effectively manage your money, book in a time to talk with us and expedite your journey to financial freedom at home and in business.