Often, it isn’t our circumstances that determine our ability to achieve goals. Typically, the most daunting obstacles to success are psychological.
Psychologists have conducted numerous studies that show the phenomenal power of a positive mindset, but Henry Ford summed it up best: “Whether you think you can or you can’t — you’re right.”
That’s why financial success boils down to one thing: having the right money mindset.
So, before you start mapping out a budget, choosing your investments, or even building an emergency fund, you need to make sure you’re approaching finances with the right mindset.
Here are five ways you can change your money mindset to achieve financial success:
1. Pay Attention to How You Talk About Money
When you’re trying to achieve a goal, the story you tell yourself matters. So do the words that you use.
Just think about the pessimistic — even violent-sounding — words and phrases you use when you talk about money. This includes off-hand comments like:
- I’m broke
- Money doesn’t grow on trees
- It cost me an arm and a leg
- I’m drowning in debt
The more you favor either negative or positive talk, the more it reinforces itself in your life. Words have a “snowball” effect. Positive words create confidence, which propels you to action, which builds positive results. Then those results reinforce your confidence and the cycle continues.
To reverse negative self-talk:
- Notice the ways you talk about money. Change always starts with awareness. Start to notice how you talk about money and stop yourself when you use negative words or phrases.
- Turn your challenges into opportunities. Instead of saying things like, “I’m bad with money,” say something like, “I’m taking steps to learn about money and make better decisions.” (Steps like reading this article. Good for you!)
- Give yourself a positive money mantra to repeat when you do say negative things. When you find yourself falling back into negative thoughts, make a conscious effort to replace them with something positive. Repeat something like, “I am worthy of having money. The world is better off when I have money. Anyone can be a millionaire — including me.”
2. Develop Pleasant Money Habits
For many people, thinking about finances stirs up feelings of stress, anxiety, and overwhelm. Those negative emotions make it difficult to dedicate regular time to managing finances, which is necessary if you want to improve your current situation.
To develop and maintain habits that allow you to take control of your finances – and your life – you need to develop a positive relationship with finances and associate financial planning with pleasant feelings.
Think of it as a road trip. Your financial goals are the destination. And yes, the main goal is simply to arrive at your destination, but how you get there matters. If the journey is excruciating — say, you run out of gas, it’s pouring rain, you get stuck in traffic — you are way more likely to give up. Instead, we need to plan to make it a pleasant drive.
To motivate yourself to set aside time every week to work on your finances, brainstorm ways to make time spent on your finances more pleasurable. When you’re working on your finances, do things that inspire feelings of peace and happiness, like lighting candles and setting music.
And — in the immortal words of Tom Haverford and Donna Meagle – TREAT YO’SELF!
*insert dance music here*
If you want an excuse to pamper yourself, this is it. Every week when you’ve spent an hour working on your finances, reward yourself! Let yourself indulge in your favorite beverage, go for a refreshing walk, or get a massage.
3. Create a New Money Identity
In his book Atomic Habits, author James Clear tells the story of two people resisting a cigarette. The first person responds to the offered cigarette with, “No thanks. I’m trying to quit.” Although this response sounds reasonable, it shows this person still believes that they are a smoker attempting to be something else. When the second person is offered a cigarette, they say, “No thanks. I’m not a smoker.” It signals a shift in their identity; smoking is no longer a part of their life.
Our self-identity guides our actions. Behavior that is inconsistent with who you believe you are will not last. As leadership expert Robin Sharma writes, “You’ll never rise any higher than your self-identity. And you’ll never move above your personal story. Think you’re meant to be average and your performance will match that belief.”
You and I both know that you are fully capable of taking control of your finances and transforming your life. There is no reason for you to settle for mediocre.
That is why you need to create a new money identity: to help yourself rise above your current narrative.
Think about the person you want to be when it comes to finances. How does your new persona choose to spend or save her money? How does she feel about money? How does she talk about money?
I find it helpful to give a name to my ideal money identity. For instance, regular Laurie-Anne may dread looking at my bank account and tend to only buy things that are on sale even if it’s not exactly what I want, but Luxury Laurie sees managing her finances as a form of self-care and takes her time to make high-quality purchases that work within her budget.
4. Build a Community that Supports Your Financial Goals
Because discussing money is taboo or brings up feelings of shame or embarrassment, people struggling to manage their money often suffer alone.
Can give you a word of advice? Don’t do this alone.
Building a strong financial future is a long road. When you have a strong support network, you are more likely to stick to your financial management plan and achieve your goals. That’s why we build community, mentorship, and accountability into our program the Million Dollar Year; it is much easier to achieve financial wholeness alongside a community of peers and mentors.
You can start to build a supportive financial network right now. Talk to loved ones you trust about your money goals and what you’re doing to get there. Tell them what you need from them, whether that’s accountability, encouragement, or just someone to talk to.
If you don’t have someone like that or you want to connect with women+ who are facing the same challenges you are, join our free Facebook group. No matter what your financial situation is, we have an incredible community of almost 4,000 women+ who can relate. This is a safe space full of dream-chasers who are quick to offer advice, celebrate your wins, and keep you on track to meet your goals.
Remember: no matter what decisions you’ve made in the past or what your current situation looks like, there is no reason to feel ashamed. The fact that you’re reading this proves you are taking steps to correct your situation. Be honest and open about your struggles. You may be surprised at how people respond.
5. Notice the Ways Money Enhances Your Life
Stress and overwhelm come from focusing on the future. Guilt and shame come from dwelling on the past.
Maybe you have made poor financial decisions in the past. Maybe you’re currently navigating unfortunate circumstances. And maybe you do have legitimate worries about the future.
But focusing on worry and negative emotions isn’t helping you. To develop peace and joy that is independent of the size of your bank account, look at the ways money is serving you here — in the present.
If you want a positive relationship with money, become aware of how money is positively impacting your life now and how it has helped you in the past. Ask yourself:
- Does money help you do things that are important to you?
- Has money helped you stay healthy or take care of your body?
- Has money allowed you to visit or take care of people that you love?
- Does money enable you to go on adventures in life?
When you become more grateful for the money you do have and the positive ways that money is allowing you to enjoy and improve your life right now, it becomes easier to save, because you seriously consider if an expense fits the person you want to be and the life you want to build.
Mastering money takes more than just changing your mindset — but that’s where it all starts. Our beliefs govern our behaviors. Changing the way you think about money will change the way you manage your money. You can rewrite the old stories that are no longer serving you and create a financially empowered mindset.