Having a healthy money mindset is extremely important in helping you build wealth for the future. So, what is a money mindset? Your money mindset is your overall beliefs around money and how you think about and identify with money.

The two extremes on the money mindset scale are scarcity and abundance. Someone with a scarcity mindset might be somewhat fearful around the idea of money and acts as though there isn’t enough money or there will never be enough money. Someone with an abundance mindset trusts that there will always be enough money and no matter what happens, everything will work itself out.

Your money mindset stems from what you already know about money, how you saw your parents act around money and it can have a lot to do with who you surround yourself with as well.

Having a negative money mindset can lead to worse financial decisions and this will start to rob you of more money over time. If you keep telling yourself you are that broke girl, that is who you are choosing to identify as and subconsciously, you will live your life and spend accordingly to fit within that narrative. This is a topic I am extremely passionate about and I have a feeling you will be too by the end of this article. Here’s how your money mindset is killing your financial confidence and what you can do to change it.

 

You Have A Negative Money Script

What you say and how you feel about money can affect how you act and make decisions. If you constantly put yourself down, doubt yourself or tell yourself you’re not good enough, that takes a toll on your mental health and will ultimately affect how you act in certain situations. Change that negative inner self-talk holding you back, it’s robbing you of more money!

Do you tell yourself that you’re bad with money or that you just don’t know anything about finance and never will? You don’t need to know everything there is to know about finance to start saving and investing money. Whether you think you can or you think you can’t, you’re right. So let’s replace those negative thoughts with positive ones.

Think about how you speak to yourself. You work hard for your money, don’t you owe it to yourself to put in a little effort to understand how to handle it? Managing money isn’t hard. Seriously! Getting past the idea that managing money is difficult is the only hard part.

If you are telling yourself a story that lets you off the hook for your bad habits, take a step back. Do you really want to identify as the person you are making up in your head? Maybe your mindset shift shouldn’t be about becoming anything but rather unbecoming everything that isn’t really you. How can you change your money script and rewrite the end of your story? Yes, we are going that deep!

If you notice your friends or family talking down to themselves, you shut it down and build them up, right? You need to start doing the same for yourself, no more self-sabotage. You’ve got this.

 

You Don’t Look At Your Money

I’m sorry to have to tell you this but you actually need to take a look at your money if you want to make better financial decisions. If you don’t take the time to look at your bank account, credit score and credit card statements, your money situation is not just going to magically get better.

Do you have debt? Do you know how much? Are you simply not checking your credit card balance because you don’t want to know? No matter how many money mistakes you’ve made in the past, it’s never too late to take action and turn things around.

I strongly believe everyone should have a budget, but at the very least you should be tracking your spending to see where your money goes (I use Mint). It seems like “budget” is a cringey word to a lot of people but it really shouldn’t be. Having a budget and being on a budget are two completely different things and it honestly comes down to your mindset. Having a budget is so empowering because you get to choose where your money goes and be in control of your money. Once you know the exact dollar amount you need to get by (rent, car insurance etc.), you also find out how much you have leftover each month to spend on whatever you want. Repeat after me: “I am in control of my money, my money does not control me.”Remember, your net worth does not define your self worth.

Once you know your financial situation, you can get a handle on it. Actually looking at what you spend and where each and every month is so important and it can help you find more money you didn’t know you had!

Learn more at How To Start Budgeting

You Spend Money Emotionally

Do you buy something for yourself when you’re having a bad day? Maybe you scroll through Instagram or Facebook and you feel down on yourself when you see your friends or influencers living these picture perfect lives all around the world. You think to yourself, why can’t I afford to do that? I work hard, I deserve a vacation too!

Eventually, all logic flies out the window and emotional spending sets in. We give into that nagging feeling of unworthiness and overspend to fill the void, no matter the cost. The further you go without recognizing these triggers, the closer you get to giving up and overspending to get that short term happiness.

The circumstances of emotional spending can be very basic. Maybe you feel like you need to buy those expensive pair of jeans or that new jacket to show off to your friends. Maybe all of your friends own fancy road bikes and in order to feel like you’ll fit in and get invited to hangouts, you blow your budget and purchase a new one to keep up. Know that it’s completely normal to feel this way and act this way, just be mindful of what you might be giving up in return. Is this actually what YOU want?

If it is truly what you want to spend money your money on, write that into your budget! Have a savings account dedicated to saving up for a new bike every so often and save up a certain amount every month so that when you do need to purchase a new bike, you have the funds ready to pay for it.

Please take a moment to write down 3 things you’re proud to have accomplished already. Then write down another 5 things you still want to achieve. These might be things like:

• owning a home in a certain area

• having a job you love/starting a business

• taking an annual vacation

• running a marathon

• being able to retire at 65 years old

• owning a fancy car/leasing a new car every _ years

It’s important to recognize how you measure your own success and work towards that. What needs to happen before you can say to yourself that you’ve “made it”? Now be kind to yourself… are your goals realistic? Is there anything that needs to change for you to be able to achieve your goals?

Once you’re able to recognize your triggers (like seeing vacation photos), you can prepare for them when they come up in your day-to-day life and do your best to work through them. So when your neighbor brags about how they’re going to be going on a month long trip to the Bahamas, remember what your goals are and how you’re working towards those. Maybe you need to unfollow people who don’t make you feel good about yourself or take a break from social media all together.

Your future will be a reflection of your decisions today, so don’t wait to do what matters. Think progress, not perfection.

 

You Compare Yourself To Others

It’s normal to compare yourself to neighbors, friends, mentors, even coworkers, but personal finance is just that, personal. Comparing your situation to others is always a losing battle. It’s so important to take a step back, look at the bigger picture, create your own personal goals and work towards achieving them. Dream big but focus small.

Not too long ago, if you were poor you looked poor and if you were wealthy you looked wealthy. Today, it’s easy to look like a millionaire but be swimming in debt. Lenders are handing out loans like hotcakes and credit cards are way too easy to abuse. There are three ways to get what you want: 1) have it handed to you, 2) go into debt for it, 3) work hard to get it. Which one are you?

Now ask yourself these questions,

• Are you trying to put on an act to portray a lifestyle you cannot yet afford?

• Do you feel the need to buy certain things just to keep up with appearances?

You may think the people you are comparing yourself to are in the same boat as you. Maybe you think they’re making around the same salary and live in the same area but you notice they are always going on vacations and they drive expensive cars. You might wonder how they’re able to afford it and wonder why you can’t.

The thing is, you can never really know another person’s situation unless you’re looking at their financial statements, which I’m guessing you aren’t. For all you know, they could have gotten a huge inheritance from their family, they could be getting paid way more than you think, they could be living in a studio apartment with 8 roommates to be able to afford their luxurious trips but they could also be swimming in debt and you simply have no idea!

Unless you know for a fact that their situation is exactly similar to yours, you cannot compare yourself to them. When in doubt, think of comparing yourself to someone else like comparing yourself Kylie Jenner. Do you feel bad for not driving a fancy car just because she does? Definitely not.

It’s normal to want all of the latest and greatest products, just make sure you’re not buying something to impress someone else. Buy it because you actually want to so you can create a life that’s good on the inside, not just on the outside.

The same goes for saving money. Just because you see someone being able to save 80% of their income, that in no way means you should strive to be saving 80% of your income, unless that is your own personal goal. You should not compare yourself to someone else. Everyone is on a different path and everyone holds different values. Give yourself permission to spend and don’t be afraid to spend. Just ensure your spending fits within your personal values and goals, not someone else’s.

Strive to be mentally and financially healthy and remember that money is a means, not an end. Money is just a tool that will help provide a level of freedom in your life so let’s shift your mindset from the poor victim to the empowered badass. When your mindset shifts, so will your money.

“It’s impossible to be in the right place at the right time if you never go anywhere.”

Disclaimer: I am not a certified financial planner or investment advisor. The ideas posted on this website are my own opinions on how I manage my personal finances. The content is specifically for educational and informational purposes and is not considered professional financial advice. Everyone’s finances work differently and you will have to do your own due diligence before making any financial decisions.

 

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