When it comes to managing our money, we’ve all heard about budget planners and savings goals. But how do you actually stick to them? It turns out the answer might not come from a new spreadsheet but from something called your “money mindset”.
This concept refers to your attitudes and belief towards your finances. And it may be more important than you think to pay close attention to this mindset.
According to Julie Hunt, a multi-award-winning Independent Financial Adviser who runs Face to Face Finance (www.ftof-finance.co.uk) it can influence everything from your financial behaviours to your spending triggers. If you want to meet your financial goals, it’s vital that you understand your money mindset so you can use it to your advantage.
Here are Julie’s seven easy steps to mastering your money mindset.
1. Understand your money mindset
The first step to mastering your money mindset is understanding it. This step is all about self-reflection and self-examination.
Think about your attitudes towards money. How do you manage your money? Are you proactive or reactive? Do you hate or love spending or saving?
Write down the answers to these questions – this is the start of understanding your money mindset.
2. Positive or negative, abundance or scarcity?
Money mindsets can be grouped in two ways. We think of them as being either positive or negative, also referred to as abundance or scarcity.
Positive mindsets give you freedom to spend or save, without feeling the need to compare yourself to others. Negative ones are where you feel you don’t deserve money and will self-sabotage yourself.
An abundance mindset means you believe that there’s plenty of money in the world, and somebody earning more than you doesn’t limit what you can have. While someone with a scarcity mindset feels that there isn’t enough to go around.
Your mindset may be positive on some issues, and negative on others. For example, you might feel positive about your mortgage, but negative about your pension.
3. Explore your money memories
Your money mindset is enormously influenced by your upbringing, and the attitudes to money that your parents displayed.
Think about what money was like when you were growing up. Was it discussed, or kept hidden? Did your parents encourage you to save?
Just thinking about where your money mindset might come from is a really helpful tool to mastering it, going forward.
4. Get honest about your views on money
So, now you have understood a bit about where your money mindset comes from and whether it’s positive or negative, it’s time to get a bit more specific.
Think about your views on money. How do you feel about earning and spending money, about taking on debt? What’s your opinion about people who have more or less than you? What’s the most important thing you do with your money?
Just understanding your money mindset is enough to help you accept and transform the negative aspects into more positive ones. Once you’re aware of what your mindset is and how it affects you, you can start to change it into something that really helps power you towards your financial goals.
5. Identify your money blocks
A money block is a specific view on money that you may have that’s holding you back, and literally blocking you from reaching your goals.
For example, many people believe that they’re “just no good with money”. Everyone can be good with money! Some people may think that “they’ll be able to afford” something. Again, with careful planning, you may find that many things are a lot more affordable than you think.
6. Recognise where other people are influencing your mindset
Most people’s money mindsets are influenced by their friends and family. Think about the kind of people you surround yourself with. What are their views on money?
This isn’t about changing other people’s minds or cutting people out of your life. It’s about understanding where you might be being influenced by external factors, and adjusting your mindset accordingly.
You’re on your own individual money journey – don’t let other people stand in your way!
7. Practice money affirmations
Positive affirmations around your money mindset can be a positive tool to help you change your financial beliefs and move towards your goals.
Deploying these affirmations can help shift your behaviour – but it’s important to use them at the right time. For example, affirming to yourself that “I am worth the money” is a good way to help overcome fears around spending money. While saying “I am worthy of financial stability” may prevent you from sabotaging yourself by overspending on impulse purchases.
You need to be comfortable with your money affirmations for them to work. Try coming up with your own!
You can find out more about money mindset in Julie Hunt’s new book, The Money Compass: An Insider’s Guide to Financial Success, which is available on Amazon and in all good bookstores now.