What’s your money mindset?
And how is it holding you back?
It’s easy to assume that your personal finances are simply down to how much you earn.
But the reality is that most of us have bad habits and unhealthy patterns that influence how we spend and save.
That’s why two people earning the exact same salary can feel radically different about their money situation – one can find themselves constantly dipping into their overdraft, while another is an expert budgeter managing to save towards a house deposit.
Money coach Sarah McCalden believes this is in large part down to what she describes as your ‘money mindset’.
‘Your money mindset is your unique set of beliefs and your attitude about money and it drives the decisions you make and the actions you take around earning money, spending money, saving money and investing money,’ she tells Metro.co.uk.
‘The way you are with money and the way it is with you, stems from your money mindset. The way you feel — whether you worry about money or don’t let it control your day — is all about your money mindset.’
Many of us formed our money mindset long ago, and our negative thought patterns around finances (‘I’m just bad with money’, for example) have deep roots.
But the good news is that your mindset can be changed – it just takes some work.
How to work out your money mindset
There are two main camps when it comes to a money mindset: the scarcity mindset and the abundancy mindset.
Sarah gives the example of a young couple, both earning around the same amount.
‘One of those people worries about money all the time,’ she explains. ‘He grew up with parents who said things like, “Money doesn’t grow on trees” and “We can’t afford that”.
‘It feels like there is never enough and something always comes up to take his last penny. He says he can’t afford to save and as soon as he gets his money each money, it’s gone.
‘He feels like he struggles through the month, each and every month and when he looks into the future, he sees years more struggle and worry. He says he spends money on his credit card just to survive (accruing more debt) and he says he’s just not good with money.
‘The other person in the relationship doesn’t worry about money. She grew up in a household where there was a lot of gratitude around money. Her mother used to say, “we’re so lucky to have everything we need”, and the question that came up a lot was: “How can I afford that?” Her parents encouraged her to think about this, rather than announce to her they couldn’t afford it.
‘She puts £40 a month into her savings as soon as she gets paid and she has built up a savings of nearly £500 over the last year.
‘She knows she has a buffer to stop her using her credit card if something unexpected happens and she needs to use her emergency fund. She believes she is good with money and she carries with her a £50 note in her wallet to remind her that she has money and feel good about it. She feels confident about money.’
You’re likely to relate more closely to one person in that relationship – which one are you?
Sarah encourages us to look at this question a bit more deeply, to really get to the root of what we believe and why.
She tells us: ‘Our beliefs about money stem from our childhood. We can’t go back and change our childhoods but we can absolutely change our beliefs and attitudes about money. In fact it’s our responsibility to.
‘Let’s first take a look and start to become conscious of what we really believe.
‘What did you learn about money when you watched your mum and dad or parental figures talk and behave around money? What did they talk about? What were their fears? What were their perspectives? Their rules around money? What choices did they make with their money? What were their attitudes to money
‘Write this stuff out to get a clear picture. Write a page for each person.
‘Also journal this question: If money were a person, how would I describe our relationship?
‘And this: What is the purpose of money at this time in my life? And what am I willing to DO to create more money in my life that I can use for its purpose in my life?
‘Also think about the people you hang around with. Do they have a positive or negative money mindset? What sort of things do they say and do, regarding money?’
It might sound like a waste of time, but seriously, sit down and write out the answers to these questions. You could end up radically changing the way you approach your cash.
How to change your money mindset
How do we start to unlearn these long-held beliefs around money?
Sarah recommends these steps…
Start a practice of gratitude
‘Once you have journalled the above questions, the very first thing I suggest is to start a practice of gratitude. If you are grateful for what you have, you will attract more. Concentrating on what you lack will lead you to thoughts like “I never have enough”.’
Write a positive affirmation
‘The second thing, which will take a little more effort, is to sit down and write out at least one positive money affirmation. One that is the opposite to one of those stubborn scarcity thoughts you have and programme it in your brain.
‘Say it on repeat and every time you catch yourself with that scarcity thought you want to replace.’
Get learning
‘The third thing is read a book on money. There are so many to choose from, but one of the books I would start with is Rich Dad, Poor Dad by Robert Kiyosaki. If you haven’t already read it, it will blow your mind!’
Give
‘If you are feeling lack, buy the Big Issue. Or take a friend out for coffee. Being generous will help you to feel good and help you to realise your abundance.’
Track your money
‘Last but not least, track your money. Everything that comes to you on a daily basis. Write it in a journal or on a spreadsheet. Even if it’s zero.
‘This one activity alone, if you do it every day, will radically change your life. Make this a habit.’
Sarah McCalden is a money mindset mentor, Canfield Success Principles Trainer and certified business coach. She runs a 30-day money challenge to help people completely overhaul their relationship with personal finance.
If you want more tips and tricks on saving money, as well as chat about cash and alerts on deals and discounts, join our Facebook Group, Money Pot.
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