How Your Mindset Affects Your Money, And What To Do About It

Money is just about numbers, right?

By Erica Gellerman3 min read
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Shutterstock/Dean Drobot

Not quite. Ask most people how they feel about money, and you'll be met with some sort of an emotional response, whether it's pride, fear, or even a general disinterest.

Being good with money isn't just about being smart with your dollars and cents, but it's also about creating a healthy mindset around money. 

What Is a Money Mindset?

Your money mindset is your attitude towards money. It's something that you develop unconsciously over the years, and it affects how you think, feel, and act with your money. 

How Much Does Your Money Mindset Even Matter?

A lot. If your money mindset is that you're bad with money, you'll probably continue to make poor choices and shy away from learning anything new. If your mindset is that you'll always be in debt, you might be more likely to keep swiping that credit card. That voice in the back of your head is saying, "What's the point of even trying to stop? You'll never get out of debt anyway."

If your money mindset is that you're bad with money, you'll probably continue to make poor choices.

Your mindset affects how you act with your money. A bad mindset can lead you to make some terrible choices. But a good money mindset? That can set you up to make smart, savvy money decisions. 

Creating a Strong Money Mindset

So we know that a bad mindset needs to be changed. But how do you do that? Here are four steps to put into practice:

1. Recognize any self-sabotaging thoughts.

You might sit here and read this thinking that you don't have any negative thoughts around money. It can be hard to notice them if they're so ingrained in your normal thoughts. Take the next week or so to be really aware of your thoughts.

It can be hard to notice your negative thoughts if they're so ingrained in your normal thoughts.

Do you get agitated when you have to look at your bank balance? When you pay your credit card, do you feel defeated? When your paycheck comes in, do you immediately think that it's not enough? When a friend tells you about a vacation they're planning, do you feel envious and think to yourself, "Well, I'll never be able to do that."

Write these thoughts down as you have them.

2. Decide who you want to be.

Once you're confronted with a list of negative money thoughts, take some time to think about how you really want to feel. Do you want to be the type of person who doesn't get discouraged by debt? Do you want to be someone who can actually create a budget and stick to it? Pick the one thing about money that makes you feel the most negative and decide how you'd like to feel instead.

3. Take small actions to get there.

Rather than creating impossible goals or trying to completely change your mindset all at once, decide on a small and simple action that you're going to take. Taking small actions repeatedly will help prove to yourself that you can make a healthy, sustained change.

If you want to be someone who can stick to a budget, set yourself a spending target for the week (e.g. you might set yourself a goal of spending $75 on food and groceries for the week). If you want to be more aware of what's going on with your money, set a goal of logging into your bank account and credit cards every Friday.

Taking small actions repeatedly will help prove to yourself that you can make a healthy, sustained change.

With each small success, your brain will be triggered with dopamine, a neurotransmitter that will make you feel good. For each week that you stick to your spending target or log in to check your bank account, your brain will be reminded of how good it feels to do that – and you'll keep doing it.

4. Practice gratitude.

Of course, just because you've planned to change your mindset and you're taking the steps toward that, not everything is going to go your way. There may be days where you miss a bill, when your car needs an expensive repair, or when you accidentally spend too much on something totally frivolous.

Rather than focusing on the negative, be grateful for what you do have and the progress you're making. You may not be perfect, but no one is. You're doing your best and getting to a healthy mindset around money is a journey, not a destination.

Closing Thoughts

When you're trying to make a change with your money, the best place to start is with your mindset. Believing that you can be good with money, and then taking the small steps to get there, will set you up for long-term success.