If you think real financial freedom is based solely on your bank account balance, think again: Personal finance expert Mary Grate-Pyos, president of Washington, D.C.-based Financially Focused, Inc., talks about the link between mind, body and bank account, and the importance of planning for the future, learning to say no and putting yourself first.

Folks getting by on a modest income often get discouraged and give up on improving their finances. How do you go about breaking that negative cycle?

It’s all about risk management. One catastrophe could destroy your finances, and therefore, your peace. You should ask yourself, ‘What will happen if I die, become disabled, lose my job, get sick, become the caregiver for my spouse or an aging parent? How long would I last financially?’ Those questions are essential to building financial and mental wealth.

You emphasize taking a holistic or spiritual approach to personal finance. Why such a strategy?

Mental wealth, as I call it, starts with a financial vision, and part of that is knowing what brings you financial peace of mind. Money—or the lack of money—is usually the root of our problems. So now you have to ask, ‘What will offer me more financial peace of mind?’ Is it making more money, changing jobs, filing your taxes and getting the IRS off your back, spending less, increasing your savings account? And then you have ask, ‘What action steps am I willing to take to get there?’ Is it paying on your bills to get out of debt, participating in the 401(k) plan at work, no longer lending money to people who will never pay you back? You also start building the right financial foundation by putting the right things into your body and mind and by exercising and eating healthily because becoming sick costs you, whether due to lost work days or higher insurance premiums. And you should read books and articles that will help you make the right financial decisions. 

You also encourage people, no matter their income bracket, to try and leave behind a financial legacy. How do we achieve that?

The least-expensive way is through insurance. Perhaps you are a lousy saver but purchase a $100,000 policy that might allow your kids to go college. You may not be able to give them much while you’re alive, but the policy might pay off your mortgage or support a foundation, your church or alma mater. So you should always plan by asking yourself, ‘What can happen that will wipe out me and my legacy’? Achieving mental wealth is about making the right decisions.

5 Major Money Mistakes To Avoid:

1. Stop using your mortgage as an ATM machine. If you’re a homeowner, it’s a bad idea to use the equity in your home to pay for consumer debt, such as cars, televisions and dishwashers.

2. Don’t miss out on valuable employee benefits. If the company offers matching funds in its 401(k) plan, for goodness’ sake, participate.

3. Give up co-signing on loans for family, friends and fools. Chances are, you’ll ruin your credit—and be left paying the bill.

4. Don’t make a student loan your first option. Consider working to pay your tuition. Ask yourself: ‘Should I take on $125,000 in student loan debt for a maximum $40,000 per year job?’

5. Run away from interest-only loans. Unless you’re an investor planning to flip the property, why pay on it for years and not own it at the end?