How Can I Afford That? image

How Can I Afford That?

The One Simple Phrase That Changes Everything

Where I grew up in Hawaii, there were two schools across the street from each other—Union School and Riverside School.

Union School was for the kids of poor families and was originally founded for those who worked on the plantations, thus its name. Riverside School was for the rich families and was originally founded for those families who owned the plantations.

Growing up, I attended Riverside School, not because we were rich but because our house happened to be just within the district boarders. Until I started school, I never knew my family was poor, but once I began classes, it was clear that there were two very different types of people, the rich and the poor…and that my family was poor.

Though I was only a small child, I was aware that my classmates at Riverside School lived at a higher standard of living than my family. Many of my friends at Riverside lived in a wealthy community connected by a bridge that crossed the river. Every time I went to play with my friends, I crossed that river. It felt like crossing into a different world. My friends lived in stately mansions; I lived in a house built for plantation workers. My friends' parents owned their homes; we rented ours. My friends played at private beaches; I went to public ones. My friends belonged to the yacht club; I worked at it.

Beyond the obvious material differences, I noticed that my friends and their families had a different mindset about life than my family did.

The rich families had a mindset of abundance. My poor family had a mindset of scarcity.

This was best summed up in the differences between two phrases.

When my poor dad wanted something that wasn't part of the budget, he would deny himself that item, saying, "We can't afford that." When we kids wanted a special toy or to go on a trip, my poor dad would deny us that, saying, "We can't afford that." When my mother wanted a fancy dress, my poor dad would deny her that saying, "We can't afford that." My poor dad had a mindset of scarcity.

Conversely, when my rich friends and their families wanted something nice, they would get it—maybe not right away, but eventually. What was the difference?

The answer was found in one simple but life-changing phrase: "How can I afford that?"

Though they didn't always have the money sitting around to buy whatever they wanted, my rich friends' parents were financially intelligent. Instead of saying, "I can't afford that," they looked at the things they wanted to buy as motivation to help them put their money to work so that they could afford to buy them.

Rather than let their finances defeat them, they looked at their finances as a game that they would win. As a result, they nearly always found a way to get what they wanted, even if it took a little patience.

In today's economy, it can be easy to feel financially defeated. Many people are simply getting used to the phrase, "I can't afford that."

Even The Wall Street Journal encouraged its readers this weekend that "It's Really OK to Say, 'I Can't Afford That,'" with tips on prep for telling friends and kids.

The problem with the phrase, "I can't afford that," is that it's a soul-killing phrase. There is no hope in a phrase like that. It kills dreams in an economy where it's more important than ever to dream big.

Rather than say, "I can't afford that," I encourage you to begin thinking with a new money mindset and to being asking, "How can I afford it?" Asking that question is life-giving. There is hope in that question. Asking, "How can I afford it," allows you to dream as big as your desired goal.

To be clear, what I'm not saying is to spend money when you don't have it on liabilities. What I am saying is to begin thinking how you can make more money so that you can afford some of the fine things in life. I'm asking you to start thinking with a mindset of abundance rather than with a mindset of scarcity.

I'm asking you to start thinking like the rich.

Because, the first step to becoming rich is to change your mindset about money and to start thinking like the rich.

So, what are you wanting in life? And how can you afford it?

To increase your financial literacy, start thinking like the rich with our free, financial education community here.

Original publish date: September 25, 2012