How to Transform Your Money Mindset
Your Money Mindset is – in its simplest form – how you think about money. It affects your beliefs and emotions, so it plays a major role in your financial behaviors. According to Dave Ramsey, our behaviors are even more important than our knowledge when it comes to money:
Financial Success = 80% Behavior + 20% Head Knowledge
“Behavior, intelligently viewed, takes into account the emotional, relational, the family history, the socioeconomic impacts and the spiritual. To ignore any of these while discussing behavior change about money is incomplete and very naïve.”
~ Dave Ramsey – Total Money Makeover
You Money Mindset is crucial if you are hoping to improve your financial wellness. But how do we build a healthy money mindset?
Let’s start by taking an quick inventory. Finish this sentence in your head, and try not to edit your thoughts, just go with the first thing that comes to mind:
Money is _________________________________.
Now, what does that thought look like? Is it positive or negative? Does it represent growth or mistakes? Would you say that thought is helping you to become more financially well, or is it impeding your progress?
If you already have a glowingly healthy Money Mindset, give yourself a high five and recognize that you are – in fact – awesome. The pin to the right explains how I feel about you …
If your Money Mindset could use some work, you are not alone. And since those overachievers above probably aren’t reading anymore, the rest of us can let our hair down, put on some sweatpants and get to work. Let’s get you started with some practical steps to improve it. Go get a piece of paper or whatever represents your favorite form of notetaking. This is important work and it deserves a spot in your journal or even sketchbook if you have one. I love this set of questions posed by Michael Kay in his Forbes article, “Deciphering Your Money Mindset:”
- Does money cause you discomfort?
- Are you satisfied with your life?
- How do you view yourself? Are you successful, struggling?
- What are your earliest memories around money?
- Are you able to comfortably talk about money?
- What sentence best describes how you feel about wealth?
- Did you consider yourself rich or poor growing up?
- Was money a source of conflict growing up?
- Does money play a central theme in your thinking?
- How would you rate your level of stress around money?
Take a look at your answers. Are they positive, negative or a mix of both? Which answers do you think have the greatest effect on how you think about money on a daily basis (take a hard look at #4 and #7, those have surprisingly long-term effects)? Can you identify a particular area that would make the biggest difference if you could change your thinking? You have already done a great work by taking an inventory of your Money Mindset. You are way ahead of most people who don’t have any idea why they act the way they do around finances.
If you REALLY want to change your mindset, collaborate with a friend and discuss your answers to these questions. Together we will find more encouragement and accountability, so take advantage of the power that is available by simply letting someone else into your financial journey. For more details on this kind of collaboration, sign up for my free email deliverable: 3 Simple Steps to Reduce Financial Stress and Grow Your Bank Account (spoiler alert, this is one of the steps!)
Need some support as you change your Money Mindset? Click here to read out about my coaching packages, or click here to apply for a complimentary financial coaching session.
