Ten years ago, I was in a financial rut. I was saving for my retirement through my employer, but everything else was a struggle. I spent most of the money I earned, I had a credit card balance, I wasn’t thinking about where my money was going. That year, I made a commitment to learn everything I could about personal finance. However, I didn’t see the results until I changed the way I thought about money. Below are the ways I was able to change my mindset about money:
Let Go of the Past
We’ve all made mistakes, especially when it comes to money. For me, I let myself get wrapped up in a lifestyle that I couldn’t afford. For years, I carried a lot of guilt and shame around the debt I had allowed myself to get into. It wasn’t even that much, but for someone who was taught growing up that you shouldn’t spend money you don’t have, I was ashamed.
Once I was able to let go of that guilt and shame, I could move on. And get out of that debt. And move forward and start building up my wealth again. So, ask yourself, what mistakes have you made? And how can you forgive yourself and move on. Trust me, you will feel 10 pounds lighter.
Stop Comparing Yourself to Others
No matter how well you are doing and what you have, there is always going to be someone who has what you want – the better job, the nice house, the fancy car, the cabin at the lake. That’s why it’s so important to stop comparing yourself to others and just focus on your own personal situation. By nature, I’m a very competitive person and I found myself wanting to “compete” with others. Once I shifted my thinking to competing with myself, my finances changed. It’s YOU vs YOU. Now, I drown out all the noise and just focus on myself – what can I do today to better my financial future, what can I do to be better than last month? And the important thing to note, is that you don’t know the whole situation. Maybe the people you are comparing yourself to, that have all the nice things, are actually drowning in debt?
Educate Yourself
The age old saying – knowledge is the key to success. For years, I felt very “lost” around my finances and I was never sure that I was doing the right thing. Once I became financial literate, my confidence increased along with my money mindset. Knowing that you are taking the correct steps to better your financial future makes you want to continue along that path and increase your wealth over time. Knowing I could meet my financial goals and have fun along the way changed my thinking around money and now I use money as a tool to live my best life. So I encourage you to continue to learn – there are so many great (and free) resources out there. You just have to commit to learning!
Align Your Spending with your Personal Values
I want you to think of the top 3 things you value in your life. It could be your family, travel, health and wellness, your career, financial freedom etc. Now for the next month, I want you to keep track of where your money is going. If those two things don’t align, your money is not working to build you the life you want. Make it a priority to align your spending and your values. This will not happen overnight and may take some time to get there. But once you do that, your mindset shifts from one of “I don’t have enough money to do the things I enjoy” to “My money is a tool to support me in living my dreams and values.”
Set Realistic and Achievable Goals
Just like any other goal, if it’s not realistic and achievable within a certain timeframe (think SMART goals), you most likely will not stick with it. Let’s pretend you have $20,000 in credit card debt that you want to pay off in 2 years, that goal alone sounds very daunting. But if you break that up into bi-weekly payments, that seems much more achievable. And when you break that up into smaller milestones, you will see progress and it is human behaviour is to continue when you see small wins. Once you start to see positive progress with your financial goals, your mindset will shift from “I will never be able to get out of this debt” to “I can do this” and that will carry on into your next financial goal.
Practice Gratitude
I am typically not one to meditate and write in a journal. I’ve tried numerous times, but have trouble quieting my thoughts. But I have started to appreciate when money comes in and when it goes out. The reason I can do this and feel good about it is that I’m aligning my spending with the future I want to create and I only buy items that I love and want to have in my home. I also appreciate when money comes in because I know I have worked very hard for it and I know that I will invest/save/spend wisely. Have you ever tried practicing money gratitude? I suggest giving it a try and seeing if it will shift some of your spending habits.
Lastly, Celebrate Your Successes - Big or Small
There is so much information out there – just do this, save this amount, only spend this amount, invest wisely, start early. I’m here to empathize with you – it’s easier said than done. There is such a large emotional component to money and our world is designed to try and get you to spend money. In 2020 alone, over 300 billion USD was spent on digital advertising. There are very smart people out there trying to get you to spend your hard earned money. When you hit a savings goal – celebrate! When you pay off your credit card debt – celebrate! When you negotiate an increase in salary for a new job – celebrate! Trust me, it will keep you going and help you reach your next goal.
Thanks for reading this post to the end! Changing your mindset doesn’t happen overnight, pick one and start working on it. Then move on to the next. Which one of these mindset tips will you work on?