What is Money Mindset and why does it matter?

Money Mindset is described as how you think about money and influences how you save, how you spend, and how you manage your debt. It includes your core beliefs about money and your attitude towards it such as what you think you can and cannot do with money.

 Developing a positive money mindset can help you overcome financial challenges, achieve your goals, and make better financial decisions. Here are some money mindset exercises you can try:

1.    Practice gratitude: Take a moment to appreciate what you have, including your financial resources, however small they may be. This exercise can help you shift your focus from scarcity to abundance. You may want to write down something every day that you are grateful for or make a mental list in the morning when you wake up.

2.    Visualize your financial goals: Create a mental picture of what you want to achieve financially. Imagine yourself living in your dream home, driving your dream car, or enjoying a comfortable retirement in a location you desire. This exercise can help you stay motivated and focused on your goals. Write down your 1, 5 and 10-year goals to help make them more real.

3.    Challenge your limiting beliefs: Identify any negative beliefs you have about money, such as "money is evil" or "rich people are greedy" or “I’m not good with money.” Challenge these beliefs by replacing them with positive ones, such as "money can be used for good" or "wealthy people can be generous" or “I’m learning to make better choices with my money.”

4.    Track your spending: Keep track of where your money goes each month. This exercise can help you identify areas where you can cut back on expenses and save more.  Looking at all of your transactions on a weekly or monthly basis can help you catch mistakes, fraud, or things that no longer bring value to you but are set up on auto-pay.

5.    Create a budget: This does not need to be negative and restrictive.  Develop a plan for how you will allocate your income each month. This exercise can help you prioritize your spending and avoid overspending.  If you have a plan for your money, you will be more likely to be empowered to achieve and exceed your goals. 

6.    Surround yourself with positive influences: Seek out people who have a healthy relationship with money, such as financial advisors or successful entrepreneurs. This exercise can help you learn from their experiences and adopt positive financial habits. There’s a saying that goes, “You become like the 5 people that you spend the most time with,” so be mindful of that.  This doesn’t mean that you can’t spend time with people who are big spenders or that have lots of debt, you just may have to exercise discipline and limit your own spending when you go out with them if this doesn’t align with your goals and values.    

7.    Practice delayed gratification: Instead of giving in to impulse purchases, practice delaying gratification by saving up for something you really want. This exercise can help you develop patience and discipline when it comes to managing your money. You could try taking a week or a month thinking about something before you decide to make a purchase to see if you really want that item or not.

Many times, we develop our money mindset from our upbringing, experiences and environment.  When you were a child, you may have been told many things like “we can’t afford this” or “you’re not good with your money” or “money is dirty” or “we shouldn’t spend money on frivolous things when there are people starving in the world”.  Even if your family didn’t talk about money topics, you likely noticed the way they talked about the way other families behaved or did or didn’t have which also can affect your thinking about money.  Think about your past and some of the things you were led to believe but that may not hold true or be serving you in your current situation. 

Remember, developing a positive money mindset takes time and effort. By practicing these exercises regularly, you can build a healthier relationship with money and achieve your financial goals.  These are some of the things I talk about with my clients to help them understand why they may make the choices they do and how they can reframe their thinking to make changes going forward.