Your money mindset is the thoughts and feelings you have developed about money based on your life experiences. Because our actions are often controlled by our thoughts, having negative feelings about money can lead to financial decision-making that impact wellbeing.
Awareness of your thoughts and feelings
Your awareness of your self-sabotaging thoughts is the first step to improve your mindset. Some examples of self-sabotaging thoughts are:
- I will never make enough money to realize my dreams.
- Debt is a part of life.
- I don’t have enough money to save.
- Investing is only for the rich.
Do you hold these type of negative beliefs about money? Take time to reflect on your thoughts and feelings. Make an effort to be aware of how you feel when the topic of money comes up. Do you cringe when someone mentions money? Do you tend to tune out when others talk about investments? How do you respond when someone talks about credit or debt? Are you dishing out money advice you don’t take yourself?
Track these thoughts and feelings because it will help you understand your mindset and highlight areas where you need to make some changes.
Money isn’t important
But money is important to live and function in our society. It takes money to afford the necessities such as food, housing, and clothing. Additionally, money enables us to purchase some luxuries. Having a mindset that money isn’t important often leads to mindless spending. When money isn’t important, then decisions are made to not save or invest money. Often the question arises, “Why make more of something that isn’t important?”
Appreciation of money and credit
Sometimes we demonize money or credit. Money and credit are tools. They are neither good nor evil. How the tool is used determines its impact in your life. When you appreciate money, your actions reflect that appreciate by using it mindfully to create the life of your dreams. When you appreciate credit, you don’t mindlessly charge purchases but use the tool to create opportunities or build wealth. For example, you financed a car that allows you to drive to/from your dream job. Or you used student loans to pay for your education that has given the means to provide for your family.
Become educated and financial knowledgeable
Knowing about money and finances isn’t just for financial professionals or those with money, everyone can benefit. When you’re educated about money you’ll feel more control about your future. A big part of improving your money mindset is growing your knowledge. The more you understand personal finance the better equipped you are to make financial decisions that improve your life.