Healthy Money Mindset

Having a healthy money mindset is essential to increasing your wealth. Yes, I know that might sound silly, as your first thought to becoming wealthy might be saving or investing – something more ‘standard’.

Let me tell you, your relationship with money and how you view it allows you to have a healthy money mindset and increase your wealth.

This post is about a healthy money mindset.

Understanding your relationship with money

Your relationship with money is how you feel and act towards it, and it can affect your mental well-being. To better understand this relationship, you should reflect on your beliefs, attitudes and habits towards money.

For example, ask yourself questions like “What does money mean to me?” or “How does money make me feel?” and you need to be honest with yourself in answering. You might find that you have limiting beliefs about money, such as “money is the root of all evil” or “rich people are greedy”, which can prevent you from achieving financial success and happiness.

Once you identify these beliefs, you can work to challenge and change them, You can also examine your habits around money, such as how you spend, save and invest it. Are you an impulse buyer or a careful planner? Do you save for the future or live month to month?

By understanding your relationship with money, you can identify areas where you may need to make changes to create a healthier relationship. This might mean creating a budget to manage your spending, seeking help from a financial advisor, or simply shifting your mindset to view money as a tool for achieving your goals and dreams. Remember, your relationship with money can be changed and improved with time and effort.

What are limiting beliefs?

Limiting beliefs are negative or self-defeating thoughts that can hold us back from reaching our full potential. These beliefs can be deeply ingrained and often operate on a subconscious level, influencing our thoughts, emotions and behaviours negatively.

Examples of limiting beliefs

“I’ll never be wealthy because I come from a poor background”
“Money is evil and those who have a lot of it are greedy”
“I’m not good with money and will never be able to save or invest”

These beliefs can be influenced by a variety of factors, including family upbringing, cultural norms and societal messages. For example, if you grew up in a family that struggles financially, you may have developed the belief that wealth is unattainable or reserved for a select few. Similarly, if you live in a society that values consumerism and materialism, you may feel pressure to keep up with others and spend beyond your means.

Societal messages can also play a role in shaping our beliefs about money. For example, the media often portrays wealthy people as greedy or corrupt, while perpetuating the idea that money equals success and happiness. This can create conflicting messages and cause us to feel guilty or ashamed about our financial status, regardless of whether we have a lot or a little.

To overcome limiting beliefs related to money, it’s important to recognise them and challenge their validity. This might involve seeking out positive role models, educating yourself about personal finance and practising gratitude for what you have. With time and effort, you can create a more positive and empowering relationship with money that supports your overall well-being.

Practising financial self-care

There are some practical steps you can take towards a healthy money mindset.

Practising financial self-care means taking care of your financial well-being to reduce stress and improve your mental health. Here are some steps you can take to achieve this:

Create a budget

A budget is a plan for how you will spend and save your money. By creating a budget, you can track your income and expenses and ensure that you are living within your means.

Save for emergencies

Setting aside money for unexpected expenses, such as car repairs can help you avoid financial stress and anxiety. Experts recommend having at least 3-6 months’ worth of expenses saved in an emergency fund.

Avoid debt

While some types of debt, such as a mortgage or student loans may be unavoidable, it’s important to avoid taking on too much debt that you can’t afford. This can lead to high-interest rates and missed payments, which can damage your credit score and cause stress.

Use credit cards responsibly

If you use credit cards, it’s important to pay off the balance in full each month to avoid accumulating high-interest debt. You can also look for cards with rewards programs that can help you save money on everyday expenses.

Prioritise retirement savings

Even if retirement feels far away, it’s important to start saving for it early to ensure that you have enough money to support yourself in your golden years.

Seek financial guidance

If you’re feeling overwhelmed by your finances or unsure of how to manage them, consider seeking help from a financial advisor, coach or counsellor. They can provide guidance and support to help you achieve your financial goals and reduce stress.

Practice self-compassion

Remember that managing your finances is a process and making mistakes along the way is okay. Be kind to yourself and focus on progress, not perfection.

Practising financial self-care can improve your financial well-being and reduce stress and anxiety. Remember, small steps can lead to big changes over time!

Avoid comparison

Avoid comparison means not comparing your financial situation to that of others. This can be detrimental to your money mindset because it can leave to feelings of inadequacy, envy and stress. Here’s how it can affect your money mindset:

Unrealistic expectations

When you compare yourself to others who may have more money or possessions, it can create unrealistic expectations for yourself. This can lead to feelings of disappointment of frustration when you’re unable to achieve the same level of success.

Envy and jealousy

Comparing yourself to others can also lead to feelings of envy or jealousy. This can cause you to focus on what you don’t have, rather than appreciating what you do have. It can also strain relationships with others, particularly if you start to resent them for their financial success.

Stress and anxiety

Constantly comparing yourself to others can also lead to stress and anxiety. It can make you feel like you’re not measuring up or that you’re falling behind, which can take a toll on your mental health.

To avoid comparison and improve your money mindset, try these tips:

Focus on your own journey

Remember that everyone’s financial journey is different and it’s important to focus on your own progress, rather than comparing yourself to others.

Practice gratitude

Instead of focusing on what you don’t have, practice gratitude for what you do have. This can help you appreciate your current situation and reduce feelings of envy or jealousy.

Set realistic goals

Setting realistic goals for yourself can help you stay motivated and focused on your own progress. Avoid setting goals based on what others are doing and instead focus on what’s important.

Surround yourself with positive influences

Surrounding yourself with positive influences, such as supportive friends or mentors, can help you stay motivated and on track. Avoid people or situations that make you feel inadequate or stressed.

By avoiding comparison, you can improve your money mindset and reduce stress and anxiety. Remember, your financial journey is unique and valuable and it’s important to focus on your own progress and goals.

Financial literacy

Building your financial literacy means gaining knowledge and understanding of financial concepts and tools. Here are some steps you can take to build your financial literacy:

Start with the basics

By learning the basics of personal finance, such as budgeting, saving and investing. This will provide a strong foundation for more complex topics.

Read books and articles

There are many books and articles available that can help you build your financial literacy. Look for resources written by reputable experts in the field.

Take courses

Many universities and online platforms offer courses in personal finance and investing. Taking a course can provide a structured way to learn and help you stay motivated.

Attend workshops or seminars

Consider attending workshops or seminars on personal finance and investing. These can provide an opportunity to learn from experts and ask questions.

Seek advice from professionals

If you have specific financial goals or questions, consider seeking advice from a financial planner or advisor. They can provide personalised guidance based on your unique situation.

Recommended books

The Simple Path to Wealth by JL Collins: This book provides a simple, yet comprehensive guide to investing for beginners.
Your Money or Your Life by Vicki Robin and Joe Dominguez: This book helps readers shift their perspective on money and offers practical advice for managing finances.
The Intelligent Investor by Benjamin Graham: This classic book provides a deep dive into investing principles and strategies.
The Total Money Makeover by Dave Ramsey: This book offers a step-by-step plan for getting out of debt and building wealth.

By building your financial literacy, you can gain the knowledge and confidence to make informed decisions about your money. Remember, financial education is an ongoing process, so don’t be afraid to keep learning and asking questions!

Practising gratitude for a healthy money mindset

Practising gratitude means appreciating and being thankful for the good things in your life, including your financial situation. Here’s how you can do it:

Keep a gratitude journal

Write down three things each day that you’re grateful for, including any positive financial aspects. This can help shift your focus away from negative thoughts and towards appreciation.

Say “thank you”

When someone helps you financially, whether it’s a friend, family member, or employer, make sure to express your gratitude. This can help strengthen relationships and build a positive attitude towards money.

Give back

Volunteering or donating to a cause you care about can help you appreciate what you have and feel more connected to your community. It can also remind you of the many blessings in your life.

Focus on abundance

Instead of focusing on what you don’t have, focus on the abundance in your life. This can help you feel more content and less stressed about your finances.

Celebrate you successes

When you reach a financial goal or achieve something related to your finances, take time to celebrate your success. This can help you feel proud and motivated to continue making progress.

By practising gratitude, you can improve your overall outlook on life and build a healthier relationship with money. Remember, there’s always something to be grateful for, even in tough financial times. So take a moment to appreciate the good things in your life and watch your money mindset improve.

Setting financial goals

Setting financial goals is an important part of building a healthy money mindset. Here are some steps you can take to set financial goals:

Identify your priorities

Consider what’s most important to you in terms of your finances. Do you want to pay off debt, save for a big purchase, or invest for retirement? Prioritising your goals can help you stay focused and motivated.

Set SMART goals

SMART stands for Specific, Measurable, Achievable, Relevant and Time-bound. Your goals should be clearly defined, so you know exactly what you’re working towards. They should also be measurable to track your progress and stay motivated. Make sure your goals are achievable, given your current financial situation. They should also be relevant to your priorities and values and have a specific time frame for completion.

Break down larger goals into smaller steps

If you have a big financial goal, like saving for a down payment on a house, break it down into smaller, achievable steps. For example, you might aim to save a certain amount each month or cut back on expenses to free up more money.

Use tools to track your progress

There are many apps and tools available that can help you track your progress towards your financial goals. Consider using a budgeting app to help you stay on track with your spending, or a savings app to help you reach your savings goals. You might also use a spreadsheet or notebook to track your progress and celebrate your successes.

Review and adjust your goals regularly

As your financial situation changes, it’s important to review and adjust your goals regularly. This can help ensure they stay relevant and achievable and keep you motivated towards achieving them.

Some tools you can use to help you set and achieve your financial goals include:

Mint: This app allows you to track your spending, create a budget and set financial goals.
Personal Capital: This app provides a comprehensive view of your financial situation, including investments, debts and net worth.
YNAB (You Need a Budget): This app provides a proactive approach to budgeting and helps you stay on track with your financial goals.

Remember, setting financial goals is an ongoing process and it’s important to stay flexible and adaptable as your financial situation changes. By setting SMART goals and using tools to help you track your progress, you can stay focused and motivated towards achieving your financial goals.