Most of us have pretty good control over what money means to us. Research shows that outside of genetics, more of our happiness is determined by factors we can control rather than factors we can’t.

Fine-tuning these inputs can make a big difference in financial security and achieving goals.

What money means to us can be broken down into three different but interconnected silos;

Silo 1 is the collections silo, this is where our earnings go and it includes our income as well as any bonuses or one-off cash boost, such as a tax refund.

Silo 2 is the feeder silo; this is where we spend from and have limited control of the outgoing cash valve that covers bills and other expenses.

Finally, there’s Silo 3, the reserve and its main purpose is to build wealth through savings and investment.

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Stuck in the scarcity loop

If you’re someone who feels that you have a limited earning potential, or the amount you spend, or save is outside your control, you’re not alone.

Among millennials, scarcity mindset is a very prominent reality.

Scarcity mindset is the idea that there isn’t enough time, resources, wealth, or happiness to go around. It’s fixating on what you don’t have instead of using the tools you do have, or that are within reach.

With ever increasing property price, cost of living on the rise and non-existent income growth over the last decade. There’s no surprise as to why the scarcity mindset and this idea of not having enough money is there, and thoughts of, if only you had a little more money, you’d be happier.

Adjusting your focus

In order to use your silos appropriately, you must have well-defined goals. A goal can be as simple as saving for you first home or as complex as building a portfolio of investment properties to fund your retirement. In most cases, the objective is to save or invest more money.

To achieve your financial goal, your strategy may include moving to a cheaper city, eating out less often, cutting the number of subscriptions you pay for, and so on. The idea being, you’ll free up cash, by adjusting your spending. However, there is a limit to this strategy.

Cutting your expenses and daily spending takes continued effort and it’s a short-term solution instead you should focus on increasing your positive cash flow which is a long-term solution.

Your collections silo has unlimited long-term potential as you can find ways to increase your earnings where as your spending can only be cut so much, there’ll always be bills needing payment. And the amount you put toward savings and investments is limited to the difference between your income and expenses.

Controlling your happiness

Behavioural-finance expert Brian Portnoy cities research by University of California in his book, “The Geometry of Wealth,” in explaining what drives our overall happiness in life. To simplify, 50% of our happiness is attributable to genetic disposition, 40% is explained by our intentions, and 10% is determined by circumstance.

Ultimately only a slice of the overall makeup of our personal fulfillment is related to external factors where we live, how we look, or what salary we earn, for instance. A much larger chunk is determined by what we do.

This means, we as individuals hold the power to better the hand we’ve been dealt and the future is ours to shape. Take control and shape your financial future into one that will allow you to enjoy a stress-free retirement.

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This article does not constitute advice; readers should seek independent and personalised counsel from an appropriate trusted adviser that specialises in property, a tax accountant and property or interior design specialist.