WHEN managing our personal finances, we often focus on developing practical skills like budgeting, saving, and investing.
These skills are important, but they’re not the only factor in achieving financial success.
Our mindset and the way we think about money has a significant impact. It can help or hinder our progress with personal finances.
Our money mindset refers to the way we think and feel about money.
It’s the internal voice which yabbers on about our financial situation, our ability to earn and manage money, and our beliefs about becoming wealthy.
A healthy money mindset involves a positive and empowering relationship with money.
On the flip side, an unhealthy money mindset often leads to negative financial behaviours and poor results.
Negative thoughts about money can be incredibly damaging to our financial wellbeing.
For example, if we believe we’ll never get out of debt, we may give up and stop taking proactive steps to fix it. If we’re guilty or ashamed about our spending habits, we may continue to overspend to soothe those negative emotions, leading to more debt and stress.
A positive money mindset has numerous benefits for our financial health. When taking an empowered approach to money we’re more likely to make smart financial decisions.
We’ll also seek out opportunities for growth and improvement, such as negotiating our mortgage or starting a side hustle.
When we’re not constantly worrying about money, we’re able to focus on the things that truly matter to us, such as family, relationships, sports, and personal hobbies.
MONEY MINDSET TIPS:
- Identify and challenge negative thoughts.
Pay attention to the thoughts and beliefs you have about money and ask yourself if they’re useful or accurate.
If not, try to reframe them in a more positive light. For example, instead of “I’m never going to be able to afford that,” try “I’m not able to afford that right now, but I can work on building my income and savings so that I can afford it in the future.”
- Focus on abundance and gratitude.
Avoid dwelling on what’s missing and focus instead on what you do have.
Express gratitude for it. This can help shift your mindset from one of scarcity to one of abundance.
- Adopt a growth mindset.
Embrace the idea that you can learn and improve your current position. Avoid feeling defeated by setbacks or money mistakes. Everyone can learn to manage money well.
- Improve your financial knowledge.
Educate yourself about money management and you’ll feel more empowered and in control. Read books, blogs, and articles.