Everything You Need to Know to Improve Your Money Mindset
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I’ve seen several instances in which budgeting has been recommended as the starting point when it comes to organizing finances. However; there is a critical step that needs to happen even before you start analyzing income and expenses. You must change your mindset! You can create all the budget spreadsheets in the world, but if you don’t change your thoughts and beliefs about money, it will be hard to see any kind of progress. If this is an area you are currently struggling with then stay tuned to learn everything you need to know to improve your money mindset.
What is Money Mindset?
So, you might be asking what does the phrase “money mindset” actually mean? Your money mindset is comprised of individual thoughts and beliefs about money. It is basically the attitude you have towards money.
How is it Formed?
Your money mindset is formed through your childhood experiences. For instance, if you watched your parents struggle with money, then you might be prone to some of those same habits. On the other hand; If you grew up watching your parents’ budget and live below their means, then you might choose to model the same behavior. This methodology makes sense because we typically learn from our surroundings. Some experts refer to this as your money story.
Why is it Important?
Understanding your money mindset is important because past influences have the ability to affect current decisions. They will determine the actions you take as it relates to money. It ultimately tells a story and helps you to figure out how your life has been affected by your thoughts and beliefs about money. Truly understanding your mindset might help you to get clear on why you get stressed when trying to make huge financial decisions. Unfortunately, it’s hard to make any progress if you don’t truly understand what and why you believe what you do about money.
10 Questions to Help You Understand You Money Mindset
If you are unsure about your true beliefs about money, here are a few questions you should ask yourself in order to help you understand your money mindset:
- What lessons did you learn about money during your childhood?
- What are your thoughts on openly discussing money with your spouse or partner?
- What are your beliefs about utilizing a budget?
- How do you feel about spending money?
- What are your thoughts on saving money?
- How do you feel about paying off debt?
- What do you believe about the ability to earn money?
- How do you feel about giving?
- What are your beliefs about people who have managed their money well and built wealth?
- What was your first personal experience with money?
There are tons of questions that I could have listed to further help you understand your money mindset. However; I just wanted to provide a few in this article just to give you an idea.
4 Ways to Improve Your Money Mindset
In order to improve your money mindset, you must first change your habits and behaviors. Below I have provided you with 4 quick actionable steps to help you get started:
- Practice Gratitude
- Remove the Scarcity Mindset
- Find Ways to Stay Motivated
- Create and Stick to Your Financial Plan
Let’s go ahead and dive in.
1. Practice Gratitude
Giving thanks is one of the best ways to improve your money mindset. This is something that I personally began to practice daily after binge-watching many of Terri Savelle Foy’s podcasts in Jan of 2019.
Every morning, I wake up and one of the first things I do is write in my gratitude journal. My journal is very simple, nothing fancy. It’s basically just a notebook that I use to give God thanks.
I write about how grateful I am for waking up and how appreciative I am of my husband for something he may have done the day before or how my toddler might have slept for 11 hours the night before. You can write about whatever you feel comfortable with. The key is to just be consistent.
2. Remove the Scarcity Mindset
With a scarcity mindset, you believe that there is never enough. According to an article published in Forbes, entitled “4 Ways to Shift Your Money Mindset from Scarcity to Abundance”, it states that “If you find yourself living paycheck to paycheck then it’s possible that you’ve cultivated a scarcity mindset in relation to money.” The writer then goes on to discuss how a scarcity mindset can be seen on opposite ends of the spectrum. For example, if your check hits the account and you are afraid to spend it due to the belief that something bad might happen and you won’t receive another check, then you have developed a scarcity mindset. On the other hand, if your check hits the account and you spend almost every dollar before midnight, then you have also developed a scarcity mindset.
In order to get rid of a scarcity mindset, you must first realize that this is the belief that you have either intentionally or unintentionally adopted. After you have recognized scarcity’s existence, start reciting positive affirmations such as the following:
“I am grateful for what I have and what is to come.”
“There is more than enough money to go around.”
“I am financially abundant.”
There are tons of these affirmations which can be found by just doing a quick search via the internet. However; if you feel compelled to write your own, then by all means, please do so. Either way will work just fine. The key to making these affirmations work for you is to first believe them and then recite them daily.
3. Find Ways to Stay Motivated
You have to find your tribe. This step is very important but sometimes overlooked. Find people or resources that will encourage you to develop a positive mindset about money. As humans, we were never created to exist on our own. You need other people and resources to help keep you inspired and motivated. In order to do this, you can utilize friends, family, books, podcasts, etc. If you are in need of an initial resource to help with this, a good book that I read just a few months ago is called Your New Money Mindset by Brad Hewitt. It will provide you with a new way of thinking about the role money plays in your life. Remember that no successful person has ever achieved success alone. So, find your tribe of people or resources to help you on your journey!
4. Create and Stick to Your Financial Plan
Last, but certainly not least, create a plan for your money. Be specific in telling your money where it needs to go instead of wondering where it went. If you assign a name to every dollar, then you will develop a habit of applying your money to the property place. Once you create the plan, you also have to stick to it. It makes no sense to write out a plan and then do the total opposite.
In addition, ensure that you and your spouse are on the same page with the financial plan. If there are conflicting interests about money, then this will make it hard to develop new habits in order to change your money mindset. You both will need to find a middle ground and get to work. If you need more guidance in this area, please click here: How to Create and Stick to Your Budget.
Final Thoughts
I have provided you with everything you need to know to improve your money mindset. I’ve discussed the what, how, why, questions to ask and actionable steps to help you improve your money mindset. In order to see a change in your mindset, you must put in the work and change your habits. If you don’t take action and are consistent about it, then there will be no changes.
