A money mindset involves patterns of your thoughts about money. A positive mindset is necessary to gain control over your finances, which is what financial experts suggest. Unfortunately, many of you have a scarcity mindset. It is a state of mind when your brain is wired into believing that money problems are perpetual. You can do nothing about them, so you do not need to put in effort to fix your financial concerns.
People living with a pessimistic money mindset are those who think that debt is necessary to survive especially if you are to make large purchases such as a house and a car. Living paycheque to paycheque is inexorable. There is no need to think about building wealth as it is unrealistic.
You are more likely to be called a person with a negative money mindset if you are familiar with these kinds of beliefs:
- Money is scarce. You will be in constant fear of losing or being running out of money and hence avoid investments, which will have a long-term impact on your wealth.
- Money is evil. You will prevent yourself from investing money. Feeling guilt and discomfort around saving and building wealth is very common when you are associated with negativity about money.
- Believing that you are not good at money. Do not assume that you are incompetent. Having no courage to deal with your financial problems will have long-term implications.
- Assuming that you have a financial fate that you cannot change. You will build a sense of powerlessness. You will not feel like fixing issues that happened as a result of your poor financial problems.
- You need to be well-off to make money. This is absolutely a myth. You can start by investing as little money as possible. It will boost your financial confidence.
How do you determine what mindset you have?
You may have neither a positive nor a negative mindset about money. A few people are out there who actually have a positive money mindset. A large number of people are not negative about all aspects of money, but there are some areas about which they feel they can do nothing. Here are the ways to determine what mindset you have:
- First off, you need to identify your most significant money challenge. Is it saving money or making enough money?
- Figure out the cause of the challenge. Is it due to your poor income? Or simply do you not feel motivated enough? Poor budgeting can also be the cause.
- Identify what you feel about your situation. Do you feel that you will never be able to achieve your goals? Are you worried and anxious? Are you losing hope and feeling you can do nothing to fix this problem?
- Pinpoints thoughts that cause these feelings. Maybe your income is low. You struggle with your budget.
- Identify what you believe about this particular situation. Do you hope that things will change, or do you feel like giving up?
Ways to change your money mindset
Do not be a firm believer that you can do nothing about your finances, even if fixing the situation is not completely in your hands. It is true that you cannot have your financial life the way you want, but you can keep it from becoming worse. Given below are the ways to change your money mindset:
- Make an effort to bring changes
First of all, you need to identify the exact cause of your financial problems. For instance, start creating a budget if it is the result of not tracking your expenses. Instead of dwelling on the thought that you cannot fix it, make an attempt to do what you can. There are various types of budgeting methods. Try all of them and check which one suits your financial circumstances.
Chances are high-interest debt is also a reason for your poor money management behaviour. High acceptance payday loans from direct lenders in the UK can help tide you over during financial emergencies, but they cost you a lot of money. You should always try to carefully evaluate the impact of such expensive loans on your budget.
You should rather try to create an emergency cushion to meet unexpected expenses. It will help you avoid borrowing money every now and then.
- Pardon your past financial mistakes
Nobody is perfect at money management. It is obvious that you will slip up. You might have made some wrong decisions in the past. Forgive all those mistakes and learn a lesson from them. A bad experience should make you sadder but wiser. Repeating those mistakes will again make your financial problems worse, and in the end, you will not be able to fix them.
Learning from your past mistakes is crucial, no matter what. For instance, if you took out a young person loan and then started struggling with payments, you should learn an important lesson from your mistake that you should never borrow money without calculating your repaying potential.
- Be motivated
Motivation is a must to achieve your financial independence. Sometimes, poor income is not the cause of your financial worries, but a lack of motivation holds you back from achieving them. Whether you are taking control of your sending or you are looking to invest in growing your wealth, motivation will keep you making an effort. Ask yourself the following question:
- Why do you want to do it?
- How will your financial situation become better by getting rid of debt or investing money?
- What goals do you want to achieve?
The final word
Changing the money mindset is a coup. You will need to identify the patterns of your thoughts and challenge them by being motivated enough to change your financial situation. The key to being in control of your finances is to create a budget, track your expenses and manage your debt smartly. Enjoy what you have, choose positive people and celebrate small successes and achievements. It will take time to see progress, but make sure to stick to your plan.
