Recently I did a Q&A on my Instagram stories and I talked a bit about money mindset in my answers. I asked if a blog on money mindset would be useful and I got so many responses saying yes! So here we are.
There is a secret psychology of money. Most people don’t know about it. – T. Harv Eker, author of Secrets of the Millionaire MInd
On a very basic level the mechanics of personal finance are simple aren’t they? Spend less than you earn, save for the future. Simple isn’t it? Well, I am sure that anyone reading this can agree that it really isn’t quite that simple. There are so many other factors at play day-to-day.
What is money mindset then? Your money mindset is made up of your unconscious beliefs about money. This is a unique set of beliefs that impacts your thoughts, feelings and behaviours about money and creates your attitude about and towards money.
Money mindset really matters and has nothing to do with how much you earn. It matters so much more than dealing with figures. There has been a lot of research conducted around the topic of money mindset and findings show that it is your attitudes and habits around money and the way that you view it that causes the problems rather than the actual tools and knowledge about money. It’s really all about how you feel about money. The BBC conducted a study called the Big Money Test and it showed that your relationship with money has a real impact on your risk of going into the red. Your unique beliefs around your feelings and how you deal with money are formed as early as aged 7. Yup, 7 years old. We take in money messages from everywhere and from those around us growing up.
By the age of seven years, several basic concepts relating broadly to later ‘finance’ behaviours will typically have developed. Link
What money messages or stories did you hear while you were growing up? Here are a few of the common ones…
- Money doesn’t grow on trees
- Money is the root of all evil
- We can’t afford it
- Do you think I’m made of money?
- Rich people are greedy
- It’s rude to talk about money
Everyone has money blocks but understanding them can help to change them. Awareness is so key to breaking those autopilot thoughts, habits and behaviours. Often I have people coming to me saying, “I just want money saving tips”. Now, money saving tips are great and all BUT all the tips in the world won’t help you unless you have this positive and inspiring vision of what you want to do and shift your mindset.
One common thought is “If I just had more money or got a pay-rise…” Now, don’t get me wrong, more money or a pay-rise is fantastic and can help so so much. However something to think about is if you’re already spending it all, having more won’t help. You can clear your debt but if you haven’t changed your mindset you risk repeating your behaviours. This was me personally, I got into debt a second time because although I had the tips and the plans to clear the debt the first time round, I didn’t shift my mindset so resumed the same behaviours and ended up in debt again for a second time. It can end up being a cycle and this is because the problem is not the money itself, it’s your mindset.
What negative thoughts do you have? Here are just a few of the common negative money thoughts…
- I’ll never get out of debt
- I don’t make enough to save
- I’ll never be able to afford that
- I’ll never make as much as Sandra or Bob
- I’m bad with money
If you think “I’m really bad with money” you then make bad decisions about money and that reinforces your belief. You will be looking for the little snippets of things that go wrong and looking to prove that you are bad with money. If you think “I can’t stop spending” then you’re always going to be thinking that and therefore proving to yourself that you cannot go a day without spending. It becomes a self-fulfilling prophecy and the more you think these thoughts, the more true they become. These then create blocks in your mind and you don’t then try to make good decisions because you are coming from a negative place and feel negative thinking “I’m bad with money anyway”.
I have some good news for you though, your mindset is not fixed- hurrah! It is possible to change your money mindset. You can break through these money blocks that are holding you back and stopping you from making good decisions and having more money in your pocket.
Start by noticing your money thoughts, they don’t even need to have money in the sentence but simply thoughts about or relating to money. Just keep noticing these. What’s your immediate reaction, what are your immediate thoughts and feelings?
Finally, something that is so important… Forgive your past money mistakes. Stop carrying them around like a heavy and draining weight.
Is your money mindset helping or hindering you? I would love to hear from you and your thoughts on this topic! If you’d like help with your money and the money mindset stuff then I would love to help you, you can get in touch here.
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