What is Your Money Mindset?
Do you know your money mindset? It’s a simple concept, but one that can carry a great amount of weight when it comes to making healthy, prosperous financial decisions for the rest of your life.
The term money mindset may seem a little nebulous, so I want to pin it down for you: Your money mindset is how you think about money. Your thoughts about money are incredibly powerful and that’s why it’s so important to pay close attention to them, and to change them when they don’t help you accomplish your goals. Here are a few simple examples to help you figure out your money mindset:
Example 1: You start thinking about a great party that you’ve been invited to and how you just don’t have the perfect thing to wear. After work you immediately go to the mall and end up buying an expensive pair of trendy new jeans that you can’t afford.
Example 2: You believe that you aren’t smart enough to get a better-paying job so you end up spending years making less money than you could.
Example 3: You believe that you can’t cut your spending enough to save for retirement and you never get around to building wealth for your future.
If you altered your mindset to remember how many great outfits you already have in your closet, to be aware of how much talent you have, or to decide that there are plenty of ways to make room in your budget for a monthly contribution to a retirement account, that would be the first step to making better financial decisions, right?
Results Begin with Your Money Mindset
I know you get this. The actions you take don’t just come from thin air—they originate from your thoughts. Having a poor mindset can be the reason you end up making all kinds of bad money moves like going deep into debt, not paying bills on time, dipping into retirement savings, and hanging on to losing investments, just to name a few.
Financial problems creep up when you’re stuck in bad patterns of behavior, like spending more than you make or falling prey to risky investments. Sometimes your money mindset cripples you the most when it causes you not to do something, like never getting around to saving for emergencies or creating a budget. So, be sure to choose your thoughts about money carefully and ditch the ideas or thoughts that are not aligned with your financial goals.
– via Quick and Dirty Tips
Making Changes To Your Money Mindset
So now that we understand what a money mindset is, it’s time to jump into the nitty gritty – how can you change something that, for many of us, feels so personal and ingrained?
There are some simple steps you can take to start shifting the way you think about and relate to money. These changes will be an investment in how to handle money and how healthy your financial life is, long term.
While changing your mind is not always easy, it is possible, and you can start by following these four steps:
Before we can make any significant changes in our lives, we need to become aware of our money challenges. We need to look at them for what they really are, even if they are not pretty (and they often aren’t!). When we really allow ourselves to feel a bad feeling for what it is, we usually want to get rid of it more than we want to keep holding onto it. That is when we’ll know we’re ready to start making some changes.
One example is the realization of the discomfort experienced when avoiding things like filing taxes by April 15th. Instead of taking care of the issue in a timely way, prolonging the problem causes greater stress later on, not to mention financial penalties. Becoming aware of the habitual approach taken when it comes to money responsibilities allows us to feel whatever we are resisting and see that it isn’t as bad as we thought.
Accept What Is.
Acceptance has to come from deep inside even if that means feeling uncomfortable. By allowing our feelings to exist and giving ourselves permission to experience pain, we open the door to acceptance.
Money often brings up feelings of guilt, shame, greed, anger and frustration, which are all emotions we work very hard to avoid feeling. Understanding our natural resistance to these feelings is useful, as it takes the emotional charge out of the resistance and allows us to think more objectively. Seeing how whatever we resist has a funny way of persisting helps us to step back and accept what is.
It may have felt like avoidance was the safest option in the past when it came to money, however as we shift into acceptance, we see how important it is to have a way to diagnostically understand our money and our feelings about it.
Allow Change to Occur.
When we diffuse our emotions, we are able to step back and shift our attention towards discovering the deeper cause of our feelings. This allows us to recognize our money patterns, as well as the root cause of our avoidance. I have used this process for years, as it helps get to the bottom of why we do the things we do. Avoiding money-planning tools often connects into fears of not having enough. Once we discover our secret feelings, we can recognize that while this may have been a past tendency, it doesn’t have to be our long-term reality.
By the time you arrive at this step, there will be much less resistance to creating and maintaining a livable budget (or whatever you wish to call it). In fact, you may feel a sense of excitement because you see that your old way of thinking has shifted into wanting to create your own path to success by harnessing greater control of your money. Using the budget as a diagnostic tool makes a lot of sense and is clearly the best way to move forward.
Knowing where you are with your money helps you take action if and when change is necessary, so you can live proactively versus reactively. Too little money coming in represents an opportunity to either cut expenses or to earn more money. In fact, I have met several people who had so much fun being creatively frugal that they actually made businesses out of their hobby, proving that you never know what may come from changing your mindset.
– via Wealth Clinic
Are you ready to start changing your money mindset for the better?