Money Mindset Shifts That Pay Off - Money Psychology

Financial health is something that is elusive until one decides to fix their finances to be optimal with their money management goals.

But, getting financially fit is not as easy as it sounds and sometimes it takes more than just deciding to get better. To be financially healthy, sometimes one has to unlearn what they have thought was right and even change direction entirely to achieve their financial goals.

Steps like making a budget, cutting expenses, making more money, saving and investing are some of the basic things people focus on to get financially better. Rarely do people think about their money mindset.

In our continuing series on Money Psychology, this week we look at the mindset shifts that pay off and which when mastered, may be referred to as the money mindset of winners - the abundance mindset.

The Money Mindset of Winners

A previous article in this series, Money Mindset: How a Scarcity Mentality is Making You Poor, focused on people’s attitudes towards money and how these attitudes affect how much one thinks they are worth, how much they think you can earn, what they can or cannot do with money, whether to invest, take on debt or to give away money.

The perception of whether one is rich or poor and the way one handles money are all based on the money mindset one has.

As we have already seen, a money mindset is a set of beliefs and attitudes about money which shape one's decisions regarding not only earning, spending or investing but also about handling money.

Abundance is what is commonly referred to as the money mindset of winners and this enables one to positively deal with their money in a healthy way.

To get to the point where one can comfortably claim to be successful with their money, there are mindset shifts that need to take place to enable this to happen.

Money Mindset Shifts That Pay Off

There is really no magic to financial health other than hard work and discipline.

Just like with other important things in life, money management requires discipline. Since discipline is not a natural mental state, it means that changing one's money mindset will require some work and grit.

Here are some steps one can take to change their money mindset.

1.       Understanding your money mindset

It is foolhardy to think that one can fight an enemy they do not know and thus, one must first know who they are and what their money mindset is if they are to successfully achieve their goal.

While some people may know their attitude(s) towards money, it is also possible that they are not fully aware of how their views shape their decision-making on matters finances.

To understand what your money mindset is, you can start by recording thoughts that pop up every time you make a money decision. By doing so and then reviewing the results of thought patterns, you can clearly become aware of your attitudes. This awareness can help clarify what your beliefs and habits are and which could also reveal what your money mindset is.

2.      Stop focusing on what others have

To get to know what your money mindset is, not focusing on what others have is one move that will enable you to focus on yourself and get to understand what you are capable of.

Focusing on others could be driven by among others, being jealous of what others have financially or the feeling of inadequacy when one compares themselves to other people whom they feel are doing much better.

Worrying about what others have can make one pessimistic and they may end up bungling opportunities they may have of getting better.

To advance and to embrace a healthy money mindset, the better choice is to shift focus from others to self and what one can do to get better.

3.      Believe in yourself

The biggest shift is starting to believe in yourself and being confident that no situation is permanent.

It is possible to improve one’s financial situation even though it may seem challenging. This begins with a can-do attitude and changing how one thinks about money.

Past experiences have a strong way of dictating how things happen currently and this includes how people relate with their money.

Despite all the challenges in the past, everyone can change their story regarding money.

Believing in yourself and working on changing how you view money will help with developing better habits.

By believing in oneself and with the desire to change one's circumstances will over time build confidence and improve one's money mindset.

4.      Make the commitment to financial stability 

To adjust your money mindset, you have to be committed to becoming financially stable.

This means that before doing anything like saving money or investing it, you have to be ready to stick to a plan for your efforts to work.

With a commitment to your process, your mindset is already getting a boost! Dedication to a plan subconsciously lifts you and it becomes a motivation to enable you to keep going.

5.  Read personal finance books

In life, people have different experiences, some of which are written in books. This is the same with finances.

Read as much as you can on personal finance to see and gauge how people became successful by adopting the right mindset. Most likely, no experience will be another and so the more you read, the better you get at getting a panoramic view of the personal finance world.

6.  Dream big

As you are working on changing your money mindset, create big money goals such that they scare you. As Liberia’s 24th president Ellen Johnson Sirleaf once said, if your dreams don’t scare you, then they are not big enough. Make this a reality with changing your money mindset.

Be sure to mix short-term and long-term goals and with each milestone, set even bigger goals that may seem impossible but which will work to motivate you.

Some of the dreams could be early retirement, wealth accumulation milestones or a plan to start your own business in say five years, become an employer and quit employment. 

Making big money goals can help you shape and reshape your money mindset and help you stay focused on what matters.

7.  Forgive yourself for your financial mistakes

People make mistakes and financial ones are some of the hardest to deal with. This keeps people stuck in a rut and they find it hard moving forward when it comes to changing their money mindset.

The best way to deal with financial mistakes is to forgive yourself and work on becoming better and not repeating the same mistakes.

Shifting focus from guilt creates room for better practices and attitudes towards money. This forgiveness disentangles one from a cycle of self-condemning to advancing to a better money mindset.

8.  Gratitude

Daily affirming yourself and being grateful are two ways you can shift a mindset.

To cultivate and maintain a healthy attitude of gratitude, listing a thing or two one is grateful for daily is a good way to change one's mindset.

By reading through your journal any time you feel negative or overwhelmed about your own finances could be all you need to set yourself on a path that gives you a healthy money mindset.

Having looked at the above, it is good to ensure that the good habits created are maintained.

Towards your goal, you can set aside some time every week to review your progress. For this, reward yourself for what you have or are becoming.