So much of your financial journey relies on your mindset. I remember struggling as a single mom with a low income and hoping that I could just earn $1,500+ per month. I worked hard to finally get a job that paid well and gave me raises. Only, once I started earning more, my financial problems didn’t go away. Money mindset is your overall feelings and beliefs toward your finances.
This was surprising because I’d always thought that more money would fix everything. If you’re tired of struggling or not meeting your financial goals, it’s crucial to realize that personal finance is about more than just numbers.
The key lies in establishing a solid foundation and being able to change your money mindset. Your mindset impacts every financial decision you make and can inhibit fear and scarcity or abundance and confidence. If you want to improve your money mindset, try these 4 things I did.
Understand How Your Beliefs Fuel Your Actions
Your beliefs about money matters so much more than you probably realize. In fact, our beliefs about everything are extremely important. If you don’t believe something is possible in your head, you won’t stand a chance of achieving it in reality.
For example, say you want to lose weight and get healthy but you believe you don’t have time to workout. Guess what will happen? You won’t have time to work out. Maybe you’ll make excuses about how tired you are after work to justify yourself. Or, you’ll run tons of errands during the week and refuse to create a schedule.
Regardless, your results will be that you won’t work out. The end result is that you won’t lose weight and get healthy just like you initially believed.
The thing is, everything you do starts as an idea in your head first. Someone may want to earn more money so they get a thought that they should go apply for a job. Maybe they come across a job ad that sounds intimidating or they believe they wouldn’t be able to perform well. What’s the result? They don’t apply for the job due to this belief. When they find a job that they do believe they can do, they would apply. Again, your beliefs directly impact your actions and results.
This is why it’s so important to assess your beliefs about money. Do you believe money is hard? Do you believe you’ll never pay off debt or that you’ll only earn $40,000 per year for the rest of your life? Your beliefs dictate what will happen in real life when it comes to managing money and meeting financial goals.
Understand Your Money Blueprint
A few years ago I read Secrets of the Millionaire Mind and it’s an amazing book for anyone to read. In it, the author mentions how everyone has deeply embedded beliefs about money and success that likely date back to their childhood. These beliefs or ‘money blueprint’ as he calls it guide how you view money and the world.
Your money blueprint can easily cause you to have a bad relationship with money if that all you’ve ever experienced. If you grew up watching parents argue about money or penny-pinch, odds are you’re going to believe money is hard and scarce.
If no one in your family or friend group has ever started a business, you may view entrepreneurship as risky or too challenging. Or, maybe you went on a ton of vacations growing up and received more gifts and material possessions than you could count. This may contribute to you making a ton of impulse purchases becoming a shopaholic as an adult.
Whatever your money blueprint is, the first step is acknowledging it and narrowing down what contributed to your current relationship with money. The next step is to kind of reverse engineer your thinking and creates new beliefs. I’ll explain this more in the next section.
Replace Limiting Beliefs
I’ve had a lot of limiting beliefs about money. Some of them are still a struggle to overcome today. However, to change your money blueprint you need to assess your limiting beliefs and disprove them. The easiest way to do this is to take a single belief and break it down.
For example, maybe your limiting belief is: I’ll never have enough money. Ask yourself why you believe this and dig deep to find the answer. Maybe you’ve always worked lower-paying jobs or your parents lived paycheck to paycheck. Perhaps you feel like you’re working so many hours and can still barely make ends meet. You can’t afford an emergency or unexpected costs.
So let’s break this down. If your belief is that you’ll never have enough money and you don’t have enough money now, maybe you feel limited because your job does not pay you enough.
Here’s the thing. Who says you have to continue to work there? Who says you can’t ask for a raise or start a side hustle? Also, why do you have to trade your time for money in order to get paid in the first place? Limiting beliefs often make you feel justified in your position and this can cause you to stay stagnant. You may not explore or even notice the opportunities around you to welcome more money into your life if you’re stuck on the belief that says I’ll never have enough money.
Changing your mindset won’t allow money to fall into your lap or your boss to randomly offer you a raise. But remember your beliefs directly impact your actions and results. Replacing your limiting belief with: I have enough and money is abundant, will get you a completely different outcome.
Realize It’s Okay to Spend Money
Conventional personal finance advice tells us to stop spending and save more money. Save save save. After a while, you may start to believe that spending money is bad or feel guilty for making certain purchases.
Maybe you start hoarding money as a result of scarcity mindset. There’s a difference between managing money for your budget and simply holding onto cash because you’re afraid there’s not enough. I’ve done this with my emergency fund. I finally felt like I saved a decent amount but felt like I could never touch the money even if it seemed necessary.
While I was able to not touch my emergency fund for well over two years, the balance hardly ever grew during that time. My scarcity mindset kept telling me that there wouldn’t be enough money for emergencies in the future if I withdrew any of the funds. This is a major falsehood.
Money doesn’t have to be hoarded because it’s not a limited resource. There’s money everywhere with new opportunities to obtain money popping up each day. Whether you spend money or save money, the action is neutral. We give it a meaning and say that spending money is bad and saving money is good. When in reality, you can spend money on your values and what’s important while still feeling great about your financial situation. You can always work for more money and welcome opportunities to earn more at the end of the day.
Improve Your Money Mindset With These Tips
Improving your money mindset won’t happen overnight. However, you can still take small steps to change your money blueprint and limiting beliefs each day. I know it will feel completely different than anything you’ve experienced before. You likely spent your whole life with certain limiting beliefs and money habits.
The key is to practice self-awareness and work on developing healthy money mindset habits over time.