Money Mindset: Change The Way You Think About Money

By Todd Kunsman

Financial Independence

Published on

Updated on

Improving your financial health usually revolves around basic categories like cutting expenses, making a budget, saving and investing, and making more money. 

And while each of those steps is important, we often neglect to focus on our money mindset first.

Typically, if you’ve listened to or read any money advice out there, it is all about diving right into your personal finances and putting a plan together. Instead, you must start with understanding how you think about money and why it has held you back so far. 

If your attitude towards money is negative or you constantly think results are impossible, what do you think the odds of you succeeding truly are?

So if you are ready to improve your life and make better financial decisions, it has to start with your money mindset.

What Is Money Mindset? 

Your money mindset is the unique beliefs and attitudes you develop about money. These ideologies can stem from your environment, influences from family, friends, and other areas as you navigate through life. And your views will also drive decisions about managing money. 

People who have a healthy mindset towards money have a few similar characteristics:

  • They see money as a tool to accomplish things
  • They don’t compare themselves to others or worry about what others have
  • They believe anyone can learn how to properly manage money 
  • They know their financial goals are obtainable with a plan 

Of course, that is only scratching the surface of traits of a positive money mindset, but you see where this is going.

But your mindset is so critical to financial success as it determines the amount of effort you plan on dedicating, how you view others who have money and your confidence in getting out of debt and investing. 

What is a broke mindset?

Unfortunately, so many people in our society have a broke mindset.

A broke mindest means that you are living your life in fear of money, that you will think you’ll never have enough, and that you’ll be unable to reach your financial goals. This affects how you manage your money and if you’ll put any effort into improving your situation. 

Honestly, for my early college years and after I truly had a broke mindset. I was living paycheck to paycheck but did nothing about it except be down on myself about it.

I thought I’d never make more than a $40,000 salary, that I’d never get out of debt, and becoming wealthy in my life would be impossible. 

And until I fixed that mindset, nothing changed for me.

But the day I started to understand my money mindset and that I could fix my financial well-being, positive things started happening to my overall finances.

How Is Your Money Mindset Formed?

Although I alluded to how your money mindset is formed earlier, I still wanted to cover it more. 

The way you view money starts with your daily environment and interactions with others.

What did your parents teach you about money (if anything at all)? How was money handled in your household growing up? Did you observe negativity around money or positivity? 

Talking about money within families can be a taboo or touchy subject, but the lack of communication is how the vicious cycle of bad finances can continue through generations.

Remember: It’s not always your parent’s fault for lack of knowledge as what they have experienced about money growing up impacted them as well. 

As you get older, your friends may have various views on money too. Their experiences can be vastly different from yours and can also influence you in a positive or negative way.

And neighbors, schools you attended, the town you grew up in, and your spouse if you get married all will greatly impact your money mindset. 

How to Change Your Mindset About Money

Changing the way you think about money can prove to be pretty difficult and may take time to adjust. Pending your age, you have years of various influences that have been ingrained into your beliefs. 

Removing the broke mindset and replacing it positively won’t happen overnight, but you can mold your mind in a better direction. 

So if you have found that your money mindset is negative and you need to change it, there are a few steps you can take to move your perception in the right direction.

1. Make the commitment to financial stability  

If you want to adjust your money mindset, one of the first places to start is ensuring you’re committed to becoming financially stable. So before you jump into investing or saving money, you need to be ready to stick with your plan and trust that your efforts will work. 

And this doesn’t have to just apply to being financially stable. Maybe you ultimately want to become wealthy, reach complete financial independence early, or a combination.

By committing to your process and getting excited about it, you are already boosting your mindset! And when you make the choice to be dedicated, you are subconsciously lifting yourself up and motivating yourself to keep progressing. 

2. Read personal finance books

Not everyone in your life is a money expert or can pass down the right mindset. But fortunately, there are tons of great personal finance books that can guide you in the right direction. 

Much of what you read is about teaching you to be better with money, but you’ll find your views on money will change for the better too. 

What I learned from reading personal finance books:

  • Anyone can learn to be better with money, it’s not as complicated as it seems
  • I don’t have to let money and finances control me
  • Managing everything on my own is possible without anyones’ help
  • Life will be less stressful and peaceful when you learn how to manage money 

3. Practice Money Affirmations 

Have you ever visualized how your finances could be better? Do you think about things you want to accomplish with your money? How often do you tell yourself all these positive things you are going to do? 

That’s what money affirmations are about, is helping you visualize results and keep you focused on your goals. When you are constantly telling yourself all the things you will accomplish and positive ideas, slowly you begin pushing negativity aside. 

Naturally just sayings things will happen with your money isn’t going to solve everything, you’ll need to put in the work and continuous effort. But as you begin molding your money mindset, creating various affirmations can start to influence the way you think. 

4. Stop Focusing On What Others Have

Fear of missing out (FOMO) can be a killer on your wallet and on your mindset. 

Think about it, have you ever been jealous of what others have financially? Have you ever felt you are behind other people your age when you see the things they have?

I think most of us have been there or felt this way before. 

By worrying about what others have it can make you become pessimistic and you end up spending money you don’t have just to try and “keep up.” 

But the ironic thing is the people you are comparing yourself to, also feel the same about others or might not have their finances together. It’s all for appearances! 

Once you realize that most people are putting up a facade, you can start to worry less and less. When I realized this myself and read about it in some personal finance books, it opened my eyes a bit more.

5. Be Grateful and Practice Gratitude  

Besides being concerned about what others have and causing yourself more financial stress, it’s a good idea to practice being grateful for what you do have and your own progress. 

When you start being grateful, you are more appreciative of your progress, your beliefs, and what you have. It’s looking at all the positives, instead of focusing on the bad sides of your finances. 

You certainly do not want to hide from your financial problems either, but often your money mindset is too focused on what’s not going your way. 

Instead, when you train yourself to be grateful you become more content with what you have and less focused on spending to try and keep up with others or feel that instant gratification from buying things.

Write down all the good things about your finances currently, keep tabs on any small wins you’ve had as you progress, and be proud of what you do have in your life. 

6. Create Big Money Goals

As you develop your financial goals, you’ll create a mix of short-term, long-term, and maybe even bigger goals that might seem impossible. But dream big!

You certainly want to have various achievable goals that might not take much effort, but think about where you really want to be later in life.

Do you dream about early retirement? Do you have certain wealth accumulation milestones you want to reach? Is your goal to become a millionaire? 

By focusing on bigger money goals, it can help you shape your money mindset in a better direction. These big goals help you stay focused on what matters and helps you build a strategy to work on.

7. Believe In Yourself 

Believing in yourself and having confidence that you can improve your finances might be a challenging aspect to changing the way you think about money.

Often, people let their past experiences dictate everything that happens in life. 

Any of these sound familiar to you?

  • “I was raised poor, so I’ll always be poor and broke.”
  • “I will never be able to retire because I don’t know how to invest.” 
  • “I’m drowning in debt and I will never be debt-free.” 

Regardless of where you are from, experienced, or grew-up with, you alone have the power to change your story. And there is no doubt that bettering your personal finances and mindset is easier for some than others — it’s just life! 

But by believing in yourself and changing the way you view money, you’ll find that it’s easier to develop better habits. And that you are more willing to put in the work, even if altering your finances seems like an impossible feat. 

You might not believe in everything you want to accomplish right away, but over time your confidence grows and your money mindset improves.