The way you perceive finances greatly impacts your monetary journey. Recalling my own past challenges as a single mother with a low income dreaming of earning over $1,500 per month, I realized that obtaining a well-paying job and raises did not erase my financial issues. The main issue was my perspective regarding finances, or my ‘money mindset’.
There’s a common misconception that increasing income is the ultimate solution to all financial problems. However, it’s vital to understand that personal finance extends beyond figures. The cornerstone lies in establishing a strong base and transforming your mindset around money. Your mindset directly influences every financial decision, either provoking a sense of fear and scarcity or fostering abundance and confidence. To enhance your money mentality, consider these four steps that I followed.
1. COMPREHEND HOW YOUR VIEWS DRIVE YOUR ACTIONS
Our beliefs, especially those around money, hold more significant influence than you may recognize. If you mentally rebuke the possibility of a certain outcome, there’s no chance that it will transpire in real-life situations.
For example, if you aspire to lose weight and become healthier but feel that you don’t have the time for workouts, you’ll likely not find the time. This could manifest as self-justification due to exhaustion after work or distractions like errands leaving no room for a routine. Consequently, your end results align with your initial belief – you don’t lose weight, as you didn’t work out.
Everything starts as an idea in your mind. When someone contemplates earning more, their initial thought might be to apply for a job. However, if a job listing appears intimidating or they doubt their skills, they will likely abstain due to these limiting beliefs. When they find a job that they feel competent to handle, they will likely apply. Hence, your views directly shape your actions and outcomes.
Therefore, it’s crucial to analyze your beliefs about money. Perhaps you think that money is hard to come by, or that you’ll never rid yourself of debt, or that your annual earnings will remain stagnant. Your beliefs will dictate your reality when it comes to handling money and achieving financial goals.
2. UNDERSTAND YOUR MONEY BLUEPRINT
After reading ‘Secrets of the Millionaire Mind’, it was brought to my attention that everyone has deeply rooted beliefs about money and success – a ‘money blueprint’ – which probably traces back to their childhood and shapes their worldview about money.
Your money blueprint directly influences your relationship with money. For example, if you grew up witnessing your family bicker over money or be frugal, you may resonate more with the notions of scarcity and difficulty around money.
Understanding your money blueprint is vital. The first step is to recognize it, discern what has formed your current relationship with money, and then strategize to reverse-engineer this process and cultivate new beliefs.
3. DISPEL LIMITING BELIEFS
To alter your money blueprint, you must identify and debunk your limiting beliefs. The most effective way to do this is to scrutinize each belief individually.
Consider a belief like “I’ll never have enough money.” Ponder on why you think this way and trace back the root cause. It could be because you’ve generally worked in low-paying jobs, or perhaps you feel overwhelmed trying to make ends meet despite working lengthy hours.
The solution consists of breaking down this belief. Suppose you think your current job doesn’t pay you enough, it might seem inconsequential when in fact there’s plenty of options for your employment situation. You might ask for a raise or consider a side hustle. Basically, limiting beliefs often lend an air of complacency to your current state, hindering growth.
Changing your mindset won’t result in a sudden influx of money or an unannounced raise. But remember, your beliefs directly influence your actions and outcomes. Replacing your limiting beliefs with positive affirmations like “I have enough, and money is available in abundance,” will usher you to a completely different result.
4. RECOGNIZE THAT SPENDING MONEY IS OKAY
Traditional finance advice advocates for curbing spending and resorting more to saving. However, this might lead to guilt or a sense of taboo around spending money. It might even cause hoarding of money due to a scarcity mindset.
There’s a thin line between managing your budget efficiently and holding back your money for fear of not having enough. For example, despite achieving a decent saving in my emergency fund over the years, I restricted myself from withdrawing it even when necessary due to the fear of not having enough for future emergencies.
However, money is not a limited resource and hoarding it is not required. There’s always an abundance of opportunities to obtain more money. As such, the act of either spending or saving money is neutral, and it’s we who label these actions as good or bad.
In reality, you can spend money on what truly matters without jeopardizing your financial stability. It’s crucial to remember that you can always earn more money.
ENHANCING YOUR MONEY MINDSET WITH THESE TIPS
Improving your money mindset doesn’t happen overnight but can be achieved gradually by taking one small step at a time to alter your money blueprint and debunk your limiting beliefs. Initially, such a change might seem strange since you probably had certain beliefs and money habits for a good part of your life.
The trick lies in cultivating self-awareness and gradually developing healthy money mindset habits over time. After all, with time and patience, even the leaf becomes a silk purse!