The first question you might have is “what in the world is a money mindset”?The simple answer to this is how you think about money. But there is more to it than that. Your money mindset determines how you think, feel and act about your money.
If you have a scarcity money mindset you will feel that there is never enough and do everything you can to make/get more money.
But if you have an abundance money mindset you feel the exact opposite most of the time. It is important to realize not just what your financial mindset is, but how it impacts your life and your spending habits.
Things That Impact Your Financial Mindset
There are many things that impact your mindset on any given topic. Your mindset is your beliefs and attitude toward things in general. This shapes the way you think, act and feel about different parts of your life.
It is the same with your financial mindset. By realizing how you think and feel about money in general you will be better able to get a better hold on your finances.
Your past and present both are tied into your overall mindset and often determines how it is shaped. If you have always had a scarcity mindset regarding money then you’ll often feel like there is never enough and your spending habits will reflect this idea.
But if you realize that there are many ways to earn money then your spending and saving habits will be very different. By working on changing your money mindset you will slowly become more comfortable in your relationship with money in general.
Why it’s Important to Understand Your Money Mindset
When you understand your relationship with money you can really get ahold of your finances. By figuring out how you think about money it can start you on a better path towards building a healthy mindset in regards to your money.
It can help you learn the best ways to manage and get control of your spending. By switching your mindset to one of abundance you start to feel free of some of the stress that comes with dealing with bills.
This I think is the biggest part of being in a good financial mindset. Not too many years ago, I would stress over every little penny that I made and spent. But by shifting my thinking just a bit, I was able to stress less about it.
One of the best things I ever did was to realize that I can always make more money somehow. Whether it was picking up more waitressing shifts, getting better at my job, or even getting a second income.
There is always more money to be made. That shift in thinking can really free up any anxiety or fear that you have about your income.
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What Your Past Has to do With Your Money Mindset
Just as with anything your past has a great deal of influence on how you see things around you. It’s the same with money.
If you grew up with parents or family members that always treated having or not having money as a bad thing. Then chances are you are the same way.
And if you grew up around people that were comfortable with money or their lack of it. Then that also plays a large role in your own relationship with money.
Take my family. Some people in my family had money. Some didn’t. And we were somewhere in the middle for a while.
But my parents never judged anyone based on their money situation. They passed that on to me.
When I was younger I had friends whose families had money and others that didn’t. If someone didn’t have money to do something, we all pitched in or took turns paying for them.
It all balanced out and I think that it played a big part in how I see money now. It all comes down to whether you are raised with the idea that you can only be happy if you have money.
This is defiantly not true at all. Happiness doesn’t come from material things or from money itself. It comes from your ability to be happy in your current situation.
What You Can do to Change Your Financial Mindset
The great thing about our mindsets is that they are not fixed. They are fluid, changing, and adaptable just like us.
You may not like change, I know I don’t. But change is necessary for survival. The biggest challenge comes from making the effort to change the way you deal with money.
Small changes are best when trying to shift your money mindset. Once you know where you stand, you can begin to reframe your financial mindset and start to work towards your goals.
Tips to Help You Figure Out Your Finances
The first step in changing your mindset is to take a look at your finances. There are certain steps that you can take that will set you on the right path to changing your relationship with money.
Some of the steps are:
Track your spending
You need to find out not just what you have coming in, but where it is going too. You can make a simple spreadsheet or find a printable financial planner to help you.
Make cuts where you can
This is the step that no one likes. You need to write down where all your money goes. Both bills and expenses. Then you need to figure out what can be cut out or down to have more money available.
Figure out your income
Go through and see exactly how much you have coming in versus how much you spend. If you are making more than you spend good. If not, that is where the cuts come in.
Evaluate your relationship with money
This is a tricky part too. But a good exercise for this is to do a word association. Write the word money at the top of a piece of paper.
Then write down words that come to you when you think of the word. Do this quickly and don’t overthink it! This can help you get a better understanding of what you really think about your relationship with money and your mindset.
The final step that you want to take is to start reframing your mindset about money if you need to.
Instead of looking at others and wishing you had the things they did or the money that they seem to have.
Look at what you have that they might not. It’s not always about the money.
Just because people have nice, expensive things. That doesn’t mean they are happy.
It just means they have a lot of stuff that they probably don’t need. If you have a place to live, food on the table, and family. Then you have more than enough already.
Final Thoughts on Your Money Mindset
Changing your mindset about anything is never easy. But there are things that you can do to make that process easier. By taking a look at your base relationship with money, you can head down a path to create a better money mindset and start to feel more comfortable about money in general.
If there’s anything you have done to improve your mindset, let me know in the comments!