When I became more conscious of my finances and set goals to get out of debt, I realized financial success was about more than just money. I learned that it’s all about mindset.
When I was a broke and struggling single mom in college, I always told myself that my life would improve tenfold once I got a better job and started making more money. If only that were true.
When I finally did land that higher paying job, my life didn’t change much. I still had the same money issues if not more. More money had just created more problems for me. It wasn’t until I acquired a better money mindset that I really started to see a shift.
What is Mindset?
Psychology Today describes it best stating, “Mindset is a belief that orients the way we handle situations.” And, a mindset is something we all have. It represents your set of beliefs, assumptions, attitudes, and methods you hold about every aspect of your life, including your finances.
You develop your mindset when you’re young by the things you hear and experience. Loved ones, friends, and society can help contribute to this.
Your money mindset has a direct influence on your current financial situation. Mindset is so important because it impacts your beliefs. Your beliefs trigger your thoughts, your thoughts trigger your speech, and your speech triggers your actions.
Picture this: you have a thought or a specific belief. That belief impacts your speech including how you talk to others and what you say about money. Since you’re saying those things, your actions then reflect your speech. As we all know, your actions lead to an outcome whether you like it or not.
Once I improved my money mindset, my financial situation improved as well. I would have never been able to pay off debt, make more money, or feel more confident about my finances in general without adopting a positive and abundant money mindset.
Here are three specific reasons why mindset is the key to financial success.
1. Managing Money is Difficult Without the Right Mindset
Let me let you in on a little secret. You can believe whatever you want to believe about money. Just because your mindset was based on a rocky foundation doesn’t mean it has to stay that way. If you believe managing money is a pain, it’s going to be that way for you.
Maybe your parents struggled with debt and managing money or you’ve had negative experiences with budgeting in the past. If you believe you’re going to fail at it too, you’re just setting yourself up to fulfill that desire. You can change those beliefs to embrace managing money and view it as something simple and rewarding.
There’s no one-size-fits-all solution when it comes to personal finance. If you keep an open mind, you’ll find that there are many different ways to organize your finances and manage your money. One of those solutions is bound to work well for you.
For example, someone with a negative money mindset may view budgeting as limiting, boring, and an activity that’s full of sacrifice. Someone with an improved money mindset will see budgeting as realistic, a safeguard, and a valuable tool to help them reach their goals. Thus, it will be easy to stick to a budget once you realize that it’s helping you stay organized and regain control of your money.
2. Mindset Can Keep You Motivated No Matter What
Announcing a financial goal can be exciting, but the process to get there can be difficult. It’s common to lose motivation after a while but that’s when your mindset should kick in. If you’re lacking in this area, you’ll give in at the first sign of an obstacle or change of plans.
If your mindset is strong, you’ll be motivated to keep pushing forward despite any setbacks. Every day you have to wake up and think about how you’re going to crush your goal. Think about your why and acknowledge the progress you’d made so far instead of focusing on how far you have to go.
Instead of saying “I can’t do it” or “I can never get ahead”, you’ll start to say things like “How can I make this work?” and “What can I do differently to get ahead?”
3. Mindset Gives You the Perspective Money Can’t Provide
When you have a positive money mindset, you’re more conscious and confident about your situation in general. Someone who’s good at focusing on the negative may view money as scarce or be unable to determine when enough is enough.
Instead, you can start to view money as a tool to help you establish the life you truly want. Sometimes, I run across people who have a lot of money but they are still unhappy. They’ve forgotten all about their journey and their why.
They compare themselves to others and keep setting new goals and higher levels for success. They end up chasing after a moving target and never learning what it means to be content.
Improving your mindset will give you the confidence and determination to go after those big goals, but it will also give you the perspective you need to realize when enough is enough.
When you reach your goals, it’s perfectly fine to spend time acknowledging them and enjoying your success.
Instead of focusing on budgeting and income first, you need to direct all your efforts toward improving your mindset. Your mindset will help you gain a clear focus on what you truly want in terms of your financial goals, help you push through obstacles, and gain perspective to embrace your present situation.