Do you find yourself living pay-to-pay, spending all your money the minute it enters your account, or wondering where your money has gone / why you don’t have the money there to pay for bills you knew were coming? You may find that you have a ‘limited’ money mindset – but don’t worry! We are here to explain what money mindset is (and what we mean by limited vs growth) and how you can change your mindset – helping you to take control and feel on top of your finances.
What is money mindset?
Money mindset is central to how you handle money in your life. It is your unique set of beliefs and your attitude about money. It is the driving factor in decisions you make regarding all thing’s money – saving, debt, spending, how you handle your money – everything!
Your unique money mindset (your core beliefs about money) is formed early on in life by observing and internalizing the money messages we learned from our parents (especially), friends, community and other caregivers.
Growth vs Limited money mindset
Quite simply, what you think about and focus on is what you get. You’ve probably heard that before, but it really is true and can be applied to your money mindset. If you focus on a lack of money, struggling to pay bills and so on, then this is 99% likely to be your reality and is what we refer to as a limited money mindset.
So, in contrast, if you focus on making and having more than enough money, that will become your reality, and we refer to this as a growth money mindset.
A prime example of a growth money mindset was shown in a study by Ramsey Solutions (yes, Ramsey as in Dave Ramsey – the money guru in the US!). They conducted a study of over 10,000 millionaires, and 97% believed they could become millionaires, they believed that it was within their control and they believed that they held the key to their success. It was their growth money mindset that caused them to succeed, not wealthy parents, a fancy education or it being handed to them.
How to change from a limited to growth money mindset
Understand your money mindset / money story.
The first step to changing your money mindset is to understand your beliefs and attitudes to money – how did they come about? What were you taught about money when growing up? What was your parents’ attitudes towards money? Answering these questions may shed some light on any negative beliefs and is the first step to being able to change any of them.
Reframe negative (limited) thoughts.
Remember, as Henry Ford once said, “Whether you believe you can do a thing or not – you are right”. Whatever you tell yourself and focus on is what you will get. And by getting away from the limited mindset you will allow yourself room for hope, problem solving and a more financially healthy life.
Stop telling yourself things like “I’ll never be able to afford that” or “I can’t get out of this debt” and change these thoughts to a positive (growth) – “I can afford the things I want” and “I have this debt, and with a focus and a plan I will be able to pay it off”.
Dream about (and plan for!) your future.
Think about what you want your future – short and long term – to look like and use this as your motivation to plan and work towards!
It doesn’t matter if you’re in debt, or don’t yet have an emergency fund – having goals for the future will ultimately help push you in that direction.
Make it happen!
No matter where you come from, your background, your level of income or your current money situation, if you believe that success is possible then you have the power to make it a reality.
Going from a limited to growth money mindset will change your life – it really will! Focus on positive thoughts and the things that you can control, and its likely you will start to see changes immediately.