With most things in life, if we are trying to achieve or change something, we often have ensure we are mentally ‘there.’ Our mindset can drastically shape a lot of things – whether we think we are good enough for a pay rise or that new job, do we really believe in ourselves enough to make it happen? In fact, our mindset can have a huge influence over our finances too and the ways in which we think about money.
Lesley Thomas, Financial Mindset Strategist and founder of The Money Confidence Academy, explains how talking more about money can help us all become better at money management and help tackle emotional issues surrounding our attitudes, from dealing with debt to saving woes. Here, she explains what having a ‘Money Mindset’ really means and how it can help you.
What is a ‘Money Mindset’?
’Money Mindset’ refers to a person’s beliefs, attitudes, and thoughts about money. It encompasses how a person thinks about and relates to money, wealth, and financial success. A person’s money mindset can have a significant impact on their financial decisions, behaviours and the results they see, or don’t see.
Our Money Mindset usually forms between the ages of 0 and 7, usually as a result of our parents, or main caregiver’s relationship with money. As small children we soak up information like a sponge and this include what our parents say and don’t say about money, and about people who have, and don’t have money. This all forms the basis of our Money Mindset, which gets further layered on a we grow older and all the experiences we have as children and then as adults.
The key element to be aware of is our Money Mindset, is directly linked to our sense of self-value, self-worth and self-confidence. Some people tie their self-esteem to their financial success, leading to a fear of failure or a drive to constantly achieve more. Others may believe that money doesn’t define their worth as a person.
Money mindset also affects how people view and handle debt. Some may see debt as a necessary tool for achieving their goals, while others may view it as a burden to be avoided at all costs.
Money mindset influences the types of financial goals individuals set for themselves. Some may prioritise saving and investing for the future, while others may focus on immediate gratification in the here and now.
People with different money mindsets may have varying levels of risk tolerance. Those with a more conservative mindset may be risk-averse and prefer safe, low-return investments, while those with a more adventurous mindset may be willing to take on higher risks for potentially higher rewards.
Money mindset can also be shaped by a person’s level of financial education and exposure to financial theories and ideas. Those with a growth mindset may be more open to learning about finances and improving their financial literacy.
How can we change our ‘Money Mindset’ to help us better handle our finances?
There are a number of keys ways to help you change and alter your money mindset, from identifying negative triggers to positive affirmation, here are my top 10 ways to help create a better attitude towards money.