Mindset About Money
Are you letting your outlook on money hold you back?
You may be surprised to hear that changing your outlook on money can positively influence your finances. For real. Your mindset about money impacts how you make key financial decisions. It even affects your capacity to achieve your goals. That’s right, a negative money mindset isn’t just stressing you out, it's keeping you down, mentally and financially.
How is this possible?
Believe it or not, you have your own unique and personal relationship with money. Psychiatrist and psychoanalyst Prudy Gourguechon stated in a Forbes article that the most important emotions in relation to money are fear, guilt, shame and envy. These relationships affect how you approach your finances and factor into the way you save and spend money.
How do we shift our money mindset into a positive relationship?
Take Time To Examine Why Your Relationship Is the Way it is
Feelings of anxiety can create a vicious cycle where you never feel able to rise above the tides of debt and fear.
Do you tell yourself that you’re ‘just not good with money’ as an excuse to continue living paycheck to paycheck? This is a lie we tell ourselves in order to remain unaccountable for our financial situation. The truth is, you could learn to save your money if you took the time to create a budget and stuck to it!
Are you afraid of looking at your bank statements because you don’t want to add up all the money you’ve spent this month and realize you didn’t need to eat out twice a week? This form of procrastination often results in overdrafting from our accounts, paying for numerous memberships and subscriptions you don’t even use (or remember you have!), and an all around lack of ownership of your money.
Where did all these bad habits and negative thoughts come from? You probably inherited them from your parents and the people you surround yourself with in the years when you first made money. Reflect on the sayings your parents used when talking about money. They probably warned you that ‘money is evil’, ‘money isn’t everything’, or ‘rich people are greedy’ when you talked about goals to make a lot of money. Slowly, you started to believe that money, not the people behind it, was inherently evil and you dropped your goals to make a lot of it. Not to mention picked up a negative reaction to those who have a lot of money, assuming that they're the villains, they’re selfish, and they aren't happy.
It’s also likely that your first coworkers spent their money as soon as they got that Friday paycheck, justifying the spending with phrases like, ‘if you don’t spend it now you’ll just spend it on something else later’ or ‘it’s better to be poor and happy than rich and sad.’ So you went to the mall, the movies, the bowling alley, you name it, despite originally getting a job to save money. Eventually, you formed the habit of spending your cash immediately and carried it with you way past that first gig flipping patties and well into adulthood.
You created a set of cognitive biases towards money and didn’t even know it. Take a few moments to dig through these biases, all the excuses and fears you use, and contemplate why you have them and how they’re affecting your overall financial picture. Consider making a list to reflect back on when you find yourself falling into the same bad patterns.
Transform the Negative into the Positive
We all had a different relationship with money growing up. You may have lived in a family where money wasn’t an openly discussed topic or one that had a volatile relationship with money that made you avoid financial planning. These are just some of the reasons you might feel completely behind the curve trying to learn how to balance a checkbook or create a budget late in life. Rest assured that this is completely normaL, but you can’t let it hold you down. Despite whatever past relationship you had with money, you have to tell yourself that you're in control of your spending, your future savings, and all that debt you accrued along the way.
If you don’t believe you’ll succeed then you’ll never motivate yourself to try. You won’t take any action steps towards growth because you’ll be too busy thinking, ‘why even bother’? You're not the same person you were yesterday. You don't have to make the same mistakes again and again because Sis, there’s always room to grow. A positive money mindset is half the battle.
Start by intentionally shifting any negative thoughts you have about money into positive ones.
Instead of, ‘money is evil’, think of money as a tool to reach your goals.
Don’t say ‘money isn’t everything’ when considering a job or a pay raise. Ask yourself
if this extra money will help you live a more comfortable lifestyle. If it will, go for it!
Stop assuming that ‘rich people are greedy’ and instead see them as people who might have worked tireless years to build a life they sought after.
Try not to justify a purchase by thinking, ‘if I don’t spend it now
I’ll just spend it on something else later.’ Instead, tell yourself, ‘if I don’t spend it
now, I can’t put it in my savings for my future.’
Throw out the old saying that ‘it’s better to be poor and happy than rich and sad.’ There is nothing wrong with striving for stability and happiness.
Remember not to beat yourself up over your past financial choices. If you’re down on yourself for the money you spent starting up your business, think of all the experiences you accumulated while you built it. They don’t all have to be AMAZING, they can be moments of learning, key decisions that made you who you are today. The next time you start stressing over your high credit card bills take a deep breath and reroute your thoughts to an action plan. You might have high bills now, but if you start paying X amount each month instead of the minimum payment you’ll be done paying them in 5 years.
Then dream about what you’ll use that extra money for. A proper savings account, perhaps? Maybe even an investment?
Your Plan, Your Future
Acknowledge that you didn’t accrue all this debt in one night, or even in a year, it was a slow and steady build-up from multiple locations. In the same way, don’t pressure yourself to pay them off at once, it’s going to take time. And tell yourself that that’s okay.
Money may be powerful, but it’s up to you to decide how that power is going to be used. Create a financial plan, a budget, and an ultimate goal, and start working towards it.
Remind yourself every single day that money is a tool, not an enemy, and empower yourself to use it to make real change in your finances and life.
Try these action steps to shift your money mindset:
Write down your thoughts about money
Is your overall relationship with it good or bad?
Where, or who, did these thoughts and beliefs come from?
Do they know why they believe what they believe? If you can, talk through your beliefs together.
Find at least three positive affirmations about money and repeat them to yourself daily.
Use your new positive mindset to make an achievable financial plan equipped with rewarding milestones and mini goals.