Transforming your Money Mindset
We live in a fast-paced and interconnected world. The US is filled with crippling debt ($986 billion in credit card debt alone), insane wealth, cultivated consumerism, and, of course, inequity. This incredible mix of “highs and lows” paired with a lack of financial education has led many to feel disempowered, confused, and hopeless when it comes to achieving their goals.
Well, that doesn’t need to be the case! We believe that financial independence, or at least room to breathe, is possible for everyone. Whether your goal is as small as a hill, or daunting as Mount Everest, your first step to climbing the mountain of your financial goals is all about getting your Money Mindset right.
This article will explore the concept of Money Mindset. We hope it will empower you to move forward with your goals, break limiting beliefs, and manifest prosperity. Whether you’re a professional seeking guidance, an aspiring entrepreneur, or just “sick and tired of being sick and tired” this article is for you!
And no, I’m not going to tell you to “just stop buying Starbs with the gals” or “just believe and your dreams will come true!” There’s a lot more to it than that!
What is a Money Mindset?
Money Mindset, put simply, is how we think about money. It’s the thoughts, beliefs, patterns, and feelings that come up when we think about that green stuff. These perceptions are shaped by our past experiences and are heavily influenced by the situations and conditions of where we grew up. Our mindset, created by our experiences, often affects the way we earn, save, spend, and invest our money!
Before we get any further….
Mindset IS NOT everything. There are systemic and societal issues, and other challenges, that do impact certain groups more than others. What we are getting at, is that our Money Mindset will bleed into how we interact with money. It’s step one to achieving our goals.
Our hope is that, when we understand our Mindset, we may be able to shift how we think to see more opportunities in the world.
No one is crazy.
In 2006, economists Ulrike Malmendier and Stefan Nagel, National Bureau of Economic Research, went through 50 years of data from the Survey of Consumer Finances, which shows what Americans do with their money.
They thought that people would be rational and make investments and “money moves” based on the opportunities available to them. But, of course, that wasn’t the case.
The researchers found that people’s decisions were heavily influenced by the experiences people had in their late teens and early twenties.
Simply put: if you grew up when stocks were constantly going up, you’d trust the market. If you grew up in the Great Depression, you wouldn’t trust the banks. No amount of rationality , logic, or data could change most people’s minds.
It’s not all about what you know or what the “experts” say. It can all be a matter of where, when, and to whom you are born.
So… does that mean we’re just screwed if we didn’t have positive experiences with money growing up? We might be biased, but NO.
Flipping the switch is possible, and in most cases needed, to achieve our financial goals!
The Closed Fist: Recognizing Limiting Beliefs
Many of us harbor limiting beliefs when it comes to money. This “closed fist” approach is great at holding tightly onto your current situation, but it won’t let anything in. These beliefs can hold us back from reaching our financial goals , and can make us feel like we are always on the defense. This “Fight or Flight” approach will do nothing but cause more stress and anxiety around money.
Common examples of a limiting belief mindset may include:
- Scarcity Mindset: This is the belief that money is limited and difficult to come across. This leads to fear, anxiety, and the never ending struggle to make ends meet.
- Fear of Failure: Relating money with the fear of failure or loss can undermine the desire to take risks and destroy the entrepreneurial spirit.
- Self-Worth: Linking the amount of money you have to how much you value yourself does nothing but create a cycle of seeking external validation through material possession.
The Open Palm: Cultivating a Positive Money Mindset
If a negative mindset around money is represented by a closed fist, it’s only natural that an open palm is the positive mindset! While a closed fist won’t allow much to leave, having your Money Mindset more like an open palm will allow wealth and prosperity in!
Here are some strategies to shift your Money Mindset:
- Self-Awareness: Begin by taking a deeper look at your current beliefs and attitudes towards money. Understanding where you stand in regard to your funds, and how you got there, will help you determine what the first steps are.
- Abundance Mentality: Embrace the belief that money is plentiful! There are opportunities all over the place- not just to make money, but to live a great life. Celebrate the successes of others, and work towards creating your own.
- Embrace Growth and Learning: Once you believe your financial dreams are possible, it’s time to fill any holes-of-knowledge you may have. Dive into Financial Literacy by watching YouTube videos, going to seminars/ workshops, reading books, and talking to experts! It can be intimidating to take the leap into an unfamiliar space, but it is SO worth it.
- To quote the amazing adventurer, Jake the Dog, “Sucking at something is the first step to being sorta good at something.”
Goal Setting: Making Money Moves
A belief without action is just a thought. Make your dream a reality by taking focused action towards what it is that you want to achieve. The SMART Goals framework is an excellent start to creating solid benchmarks. When you set your intention, you set your outcome!
The SMART Goals framework in a nutshell:
Specific– Make the goal as concrete as possible.
- Ex. I will pay off all of my debt
Measurable– Make sure the goal is set with a concrete number.
- Ex. I will save $1,000.
Attainable– Make sure the goal is actually possible, but still challenging.
- Ex. If you make $40,000 a year, it might not be possible to save $100,000, but it is very possible, but a stretch, to save $10,000!
Relevant– Ensure the goal is related to your overarching goal
- Ex. I will start by saving $1,000, which will lead into my full emergency fund of $10,000.
Time Bound– Add an end date to the goal to ensure it gets done!
- Ex I will have all of my debts paid off by October 9th of this year
Conclusion
Making these changes will not take hold overnight. It may take a few days, weeks or even a couple months to be lasting! Flipping the switch on your Money Mindset to one of positivity, abundance, and growth is the first step we must take in order to build up our finances and achieve our goals.
At Within Range Life Coaching, we specialize in helping our clients break past their barriers and achieve their goals so they can live a life worth remembering. CLICK HERE to learn more about our “Ambitious and Aligned” coaching program! Fill out the form below and learn how we can help you achieve your full potential.