Do you recognize any of these habits: leaving bills in the mailbox without opening them, avoiding checking your bank account balance, or believing that saving money is impossible? While some individuals have no trouble managing their finances, others struggle to even think about their own money. The variations in how people handle their finances can be attributed, in part, to their unique money mindset. In this article, we will explore the concept of a money mindset, its formation, and ways you can shape your own. Let’s begin!
What is a money mindset?
A money mindset refers to our fundamental outlook and fundamental convictions regarding money. Our self-worth in terms of finances is often connected to our personal view on money, regardless of whether we consciously adopted it or acquired it from external sources.
Our financial decision-making is influenced by these attitudes, whether we are aware of it or not. The impact of our money mindset on our present and future financial situation is directly linked, either positively or negatively.
The way you think about money, for example, has a significant impact on how you approach salary discussions. It influences both your self-perception and the value you place on yourself, as well as your determination in negotiating for a higher salary with your boss or clients.
Characteristics of a positive money mindset
Achieving financial independence and feeling at ease about the balance in your bank account is undoubtedly desirable. If you already possess a positive attitude towards money, you are in closer proximity to accomplishing this goal than you might realize. Adopting a positive outlook on money and managing your personal finances can often serve as a driving force behind achieving prosperity and liberation from financial constraints. Additionally, this approach offers numerous other advantages.
Individuals who possess a positive mindset about money:
- see opportunities instead of obstacles
- ask for help rather than struggle by themselves
- know there is a solution for every financial problem
- often deal proactively with difficult decisions
- are open to learning new things
- generally have a solution-oriented attitude
- have a more optimistic outlook — even in uncertain times
Characteristics of a negative money mindset
Similar to how having a positive outlook on money can inspire and drive you towards your objectives, having a negative mindset can hinder your plans, impede your progress, and potentially have detrimental effects on your financial future. Frequently, a negative money mindset serves as a disguise for underlying emotions such as fear, anxiety, as well as feelings of vulnerability or powerlessness. Individuals harboring negative attitudes towards money often view financial matters as overwhelming and unsurmountable. Consequently, they fail to assert control over their finances or simply avoid addressing them altogether.
These emotions are reasonable and quite prevalent. Regrettably, they frequently result in detrimental thought patterns and exaggerated thinking. The outcome of having a pessimistic attitude towards money can be an even more severe mindset, hindering your ability to regain control of your finances.
Individuals who possess a negative outlook regarding finances:
- are scared of or intimidated by financial topics
- don’t feel confident that they could learn about finance or develop any skills
- procrastinate or avoid financial tasks
- feel a lack of control and generally have a very negative attitude toward money
Where do money mindsets come from?
Your attitude towards money is often shaped by various factors, resulting in subconscious beliefs that develop throughout your life. The environment you were raised in is a major factor that impacts your perspective on money. The manner in which your parents or caregivers discussed and handled money influenced your views on finances, even if you were unaware of it. Additionally, other individuals in your environment, such as relatives, friends, acquaintances, and teachers, may have also played a significant role in shaping your mindset.
You may have been subjected to negative talk such as:
- Money can’t buy happiness.
- Being rich doesn’t solve your problems either.
- We can’t afford this.
- Money is the root of all evil.
- You can’t take money to the grave with you.
Continuing on, the repeated exposure to negative phrases like these ingrains them into our subconscious. Similarly, individuals raised in a positive environment absorb the messages about money, which in turn aids them in developing a positive money mindset.
How to Develop a Positive Money Mindset
1. It is permissible to allow yourself to dream: There is no problem in aspiring for great things and having big dreams. It is possible to attain wealth even if you come from a non-affluent background. We are aware of the feasibility, and here is our reasoning behind it. In all likelihood, you are the first or only person in your family to pursue a career in technology. Isn’t this a unique achievement within your family? This serves as evidence that you possess boundless potential and are capable of achieving any goal you desire. You are diligently working towards your aspirations of establishing a successful career in the tech industry, even if it means venturing into uncharted territory within your family. So, never shy away from thinking big and pursuing your dreams!
Step 1: Growing up, you have been exposed to various beliefs and practices regarding money, some of which are beneficial while others are not. Step 2: In order to progress, it is essential to eliminate the false notions or myths about money. Step 3: These myths include ideas such as “I can postpone saving for the future,” “having a significant amount of debt is typical,” “if you can’t stop thinking about something, you should buy it,” and “there is no need for an emergency fund if you want to avoid unfortunate situations.” Step 4: The number of these inaccurate beliefs is vast, which is why it is crucial to detach oneself from them. Step 5: By releasing these limiting beliefs, one can experience personal growth and development.
If you lack knowledge on the right thing to do, it becomes difficult to make the correct decisions. In order to effectively handle money, it is crucial to be financially literate. That is why we have collaborated with Money Africa to provide financial skills to 10,000 women. Additionally, the founder of Money Africa conducted a session on managing personal finance for individuals in the tech field. If you were unable to attend, you have the opportunity to watch the webinar by following this link. Remember to always make decisions based on informed knowledge.
When making decisions, it is important to plan according to your own situation and preferences. Factors such as your lifestyle, goals, income, needs, and wants should be taken into account. It is not advisable to make decisions based on what others are doing, but rather on what will work best for you. Do not let societal standards, family, or friends dictate how you should manage your finances.
Step 5: Identify your “why”: What is the reason behind your aspiration to create wealth and attain financial freedom? Jot it down and keep it in mind, so whenever you face choices, you can consider your “why” and use it as inspiration to make the correct decision.
Step 6: Make a decision: It is important for you to make a choice about what you desire. Keep in mind that this is a process that requires dedication. Achieving financial success does not occur simply by hoping for it. Recognize that the decisions you make will either bring you closer to or further away from your financial objectives.
It is entirely achievable for you to accomplish whatever you desire. Living a life without financial struggles is within your grasp, and your past should not impose any limitations on you. Reflect on your aspirations and begin taking actions that will propel you towards your objectives.
The statement made by Henry Ford was that if you believe that you can do something or if you believe that you cannot do something, then you are correct in your belief.
