When we asked our social media followers what financial happiness meant to them, only a small number of their responses centered around possessing a larger amount of money in their bank accounts.
Instead, they expressed sentiments such as “the absence of worry”, “the ability to easily order takeout without financial concerns”, and “the freedom to make a self-indulgent purchase without any feelings of guilt.”
The answers we believe are quite telling demonstrate the emotional nature of money. Therefore, occasionally, when expressing our desire to gain knowledge about our finances or our intention to be more responsible with money, what we truly seek is to improve our emotional relationship with money.
Loqbox aims to assist you in comprehending the connection between your emotional response to money and your financial wellbeing, also known as your “money mindset”. We are here to guide you through the steps necessary to rejuvenate your outlook.
What is your “money mindset”?
Our beliefs about money begin with our money stories
The beginning of your money journey stems from your childhood. The statements related to finances that you heard from your family members or caregivers, as well as what you witnessed on TV or in the news, can influence your current beliefs and attitude towards money.
Those beliefs and attitudes form your money mindset
The way you think about money can greatly impact how you emotionally react to difficult financial situations.
For individuals who have a negative perspective on finances, it may be challenging to overcome setbacks. On the other hand, if one possesses a positive mindset regarding money, they may find it simpler to confront financial obstacles with assurance. An illustration is provided below:
When your card is declined at the supermarket checkout, what emotions do you experience and what would you typically say to the cashier?
There are individuals who may handle this particular situation in a calm manner, even if they are aware that their card was declined due to a slight shortage of funds. In contrast, there are others who may find this situation quite challenging.
Even if they had the knowledge that their account had enough funds to cover the transaction, they could potentially experience anxiety and find it difficult to communicate with the cashier.
It’s important to remember that your financial mindset can change
By taking some time to work on your beliefs about money, you can engage in self-reflection regarding your money mindset and determine if you are interested in making any changes.
You may come to the realization that your attitudes towards money are causing both financial and emotional drawbacks. (Alternatively, you may realize that you already possess a beneficial attitude towards finances. If this applies to you, congratulations!)
If you believe it is necessary, you have the ability to alter your financial mindset.
Fixed mindset vs. growth mindset?
What are the meanings of the terms “growth mindset” and “fixed mindset” that people frequently discuss?
If you possess a “fixed money mindset,” you possibly hold the belief that your financial situation is unalterable and incapable of change. You may perceive no purpose in increasing your understanding of the financial realm since it wouldn’t impact your daily interaction with money.
If you possess a mindset focused on growth money, it is possible that you hold the belief that you hold a certain level of influence over your financial future. This approach towards finances enables you to objectively analyze the reality of your situation, determine what resources and expertise you may require to enhance your circumstances, and develop a strategic plan for progress.
A fixed financial mindset could be a barrier to improving your relationship with money
If you believe that money is something that is beyond your control, it might be helpful to consider that there are usually actions you can take to enhance your connection with money. Therefore, if you suspect that you have a rigid mindset towards money, it may be beneficial to consider implementing alterations.
4 signs it might be time to change your money mindset
1. You’re constantly feeling worried about money
On a scale of 1 to 10, how frequently do you consider your financial situation?
If you frequently experience anxiety about finances, it may indicate the necessity to evaluate your attitude towards money. By altering your mindset, you might attain additional time to direct your attention towards meaningful aspects of your life.
2. You have a financial scarcity mindset
If you think you will never have enough money to feel comfortable or in control of your finances, you might have a “financial scarcity mindset,” which is different from a “saving money mindset.”
When we have such feelings, it becomes easy to believe that we lack any influence over our financial destinies. Consequently, we tend to be excessively critical towards ourselves, which may result in refraining from indulging in personal expenses, despite their affordability.
Individuals who possess a mentality of having limited financial resources may exhibit a proclivity for being wary of expenditure, regardless of the potential positive impact it may have on their overall financial state. This can manifest as a reluctance to dip into their savings, even in critical situations, or solely making the bare minimum monthly repayments on their debts.
If you believe that you are simply being cautious, it may be worth considering whether this mindset is preventing you from achieving your financial objectives. Embracing a mindset centered on financial freedom could potentially alleviate the difficulty and overwhelm associated with pursuing your goals.
3. You’re feeling negative feelings like guilt, shame or anxiety
At times, our emotional reactions towards money can motivate us into taking action. However, when intense feelings such as guilt, shame, or anxiety take over, it can be challenging to initiate steps for bettering your circumstances.
4. You describe yourself as “bad with money” or as a “natural spender”
The impact of our self-talk on our daily feelings is significant. Self-talk refers to the way we communicate with ourselves internally. We tend to be less compassionate with ourselves compared to how we treat others.
If you often blame yourself for your financial issues, have concerns about the worst possible outcome, or predominantly concentrate on the negative aspects even while making positive strides towards your financial targets, it is possible that you are involved in financial negative self-talk.
By making a shift in your money mindset, you can clear your mind and become more constructive in providing feedback to yourself. You may discover that cultivating compassion actually facilitates progress.
Here are some tips to get you into that money-making mindset:
1. Believe that you can make money
Above all, it is crucial to have faith in oneself. Not just having faith in one’s ability to earn money, but also having the confidence that one deserves to make money.
2. Be proactive in your approach to making money
Some individuals have a tendency to passively approach their finances, believing that their income will automatically grow in due course. Nevertheless, this is only occasionally true. To enhance your earnings, it is necessary to actively take control of your financial approach.
3. Take action and put your plans into motion
Although having plans is important, taking action and implementing them is crucial to ensure they are effective. Achieving your goals requires being proactive and decisive. While making decisions can be challenging, once you have chosen a course of action, it is vital to remain committed and follow through with it.
4. Stay focused on your goals and don’t give up
In order to achieve goals, it is essential to remain focused and committed. It is crucial to possess a precise understanding of your desired accomplishments and chart a course of action to accomplish them. Breaking down your goal into smaller tasks can aid in staying aligned with your objectives.
5. Celebrate your successes, no matter how small they may seem
Celebrating your successes, whether big or small, is crucial as it not only boosts your confidence but also serves as a reminder of your capability to achieve your goals.
Regularly checking in with your money mindset is crucial in order to adopt money-making behaviors. Mindset should be consistently exercised, making it imperative not to neglect it. A positive money mindset opens up endless money-making opportunities.
