No matter what you want to accomplish or change in your life—like having more financial success, stronger relationships, or better health—it’s critical to consider the role of your mindset.
Your mindset is a big part of what’s gotten you to where you are right now. It’s largely responsible for the financial success (or lack of it) that you already have.
So, if you want your life to change, your mindset will also need an adjustment.
What Is Money Mindset?
Your money mindset is the sum of the attitudes and ideas you bring to a situation related to your personal finances. It’s the mental habits you have for thinking about and responding to any financial circumstance; they’re usually created by your previous financial experiences.
Every change you make in the physical world—such as sticking to a spending plan or contributing more to a retirement fund—comes after a mindset change. Just like an inventor has to come up with an idea before she can create a prototype to see or touch, you have to make a mindset shift before any desired action can become your reality.
Since your mindset is the wellspring for all financial change, I made it the first chapter of my book Money Girl’s Smart Moves to Grow Rich. In “What’s Your Money Mindset?” I explain why we have bad financial habits in the first place (such as overspending, falling prey to brand marketing, or being too generous) and how to take control.
3 Money Mindset Tips and Tools for Financial Success
Here are 3 tips and tools to dramatically improve your money mindset and have more financial success:
Money Mindset Tip #1: Make Small Changes Over Time
No matter what lifestyle changes you want to make, it’s better to make small ones over time than to try to make a huge one right away. While that might seem counterintuitive, trying to do too much at once is why so many people fail to achieve New Year’s resolutions.
For instance, if you want to exercise more or eat a better diet, it’s extremely difficult to stick to a strict daily exercise program and start cooking 3 healthy meals a day, all at once. Those who succeed make small incremental changes to their lifestyle and build on that foundation.
You might start with a goal to drink a certain amount of spring water as soon as you wake up or to take a ten-minute walk after dinner. Small changes that become habits create momentum for additional improvements.
The mental game of money and financial success is no different. Decide to implement one small change this month, like tracking spending each week, setting up a retirement account, or figuring your net worth.
Once you have success accomplishing a small financial change or goal then add more, such as creating a spending plan, cutting unnecessary expenses, and building credit.
Recommended Mindset Tool: Use the Strides: Habit Tracker app to start a good financial habit. You can track all your goals and habits and get reminders to hold you accountable and charts to keep you motivated.
Money Mindset Tip #2: Practice Gratitude Every Day
A powerful way to achieve more financial success is to practice gratitude. Having gratitude simply means appreciating the good things you have (even if you’d like more of them) and the people who’ve helped you along the way, such as teachers, family members, or friends.
One the of world’s leading scientific experts on gratitude is Dr. Robert Emmons, a professor of psychology at the University of California, Davis. He’s the author of several books including Gratitude Works!: A 21-Day Program for Creating Emotional Prosperity.
The research on gratitude documents the psychological, physical, and social benefits it can bring, including:
- Increased happiness, by boosting a variety of emotions and mindsets, such as feeling satisfaction from life and experiencing joy, enthusiasm, positivity, and optimism.
- Strengthened relationships, by feeling closer to friends, being more satisfied with romantic partners, having compassion, and promoting forgiveness (even between ex-spouses after a divorce).
- Reduced anxiety, by having fewer feelings of helplessness or worry.
- Better sleep, by falling asleep faster, sleeping more hours each night, and feeling more refreshed in the morning.
- Improved overall health, by boosting the immune system, reducing illness, lowering blood pressure, and having fewer aches and pains.
- Raised resiliency, by recovering from negative or traumatic events faster, including veterans with PTSD.
When it comes to your personal finances, practicing gratitude doesn’t make dollar bills fall from the sky. However, being healthier, happier, less stressed, and more resilient can be the keys to unlocking your true financial potential.
To practice gratitude, take a moment at least twice a day (ideally before you go to sleep and shortly after you wake up) to acknowledge several reasons to be grateful. They could be something seemingly simple, like feeling good or having a furry companion. You might say them out loud or enjoy writing them in a special gratitude journal.
Recommended Mindset Tool: Use The Five Minute Journal for daily inspiration and motivation. It’s an inexpensive way to remember to reflect on your successes and practice gratitude on a regular basis.
Money Mindset Tip #3: Identify Your Values
One of the best ways to improve your financial success is to align your spending with your values. So it’s critical to identify your values first.
Values are what you hold dear, such as family, freedom, security, or health. They are what’s most important to you, deep down in your core. After you identify your values, you’ll focus more on them every day and experience a powerful mental shift.
I can tell what’s most important to you by how you spend your money. If you’re like most people, you’re probably spending lots of money on things that don’t align with your values. Why? Because you’re not clear about exactly what your values are.
For instance, let’s say education is one of your values and you want to make sure that you can send your child to college. But you aren’t setting aside money in a college fund. Instead, you’re buying designer clothes or dining out too frequently. This is an example of not aligning your spending with your values.
A smart tip is to identify your top 5 values, write them on a sticky note, and put the note in your wallet or on your credit cards. That will force you to remember your values before spending.
Recommended Mindset Tool: Read or listen to How to Develop Your Personal Mission Statement by Stephen Covey. It will help you develop a long-term vision and govern your life according to your deepest priorities and financial goals.
How Other People Influence Your Money Mindset
Another important point about mindset is that you’re influenced by the people who you spend the most time with. They either lift you up or bring you down.
Motivational speaker and personal development pioneer Jim Rohn said, “You are the average of the 5 people you spend the most time with.” My husband brings this point home by saying “You can’t soar with eagles when you’re hanging out with a bunch of turkeys.” In other words, continually work on spending time with a better crowd.
That doesn’t mean you should ignore family or lifelong friends who may not share your values or challenge you. But notice how you feel when you’re with different people. Choose to spend more time with those that support your values and nurture your goals and less with those who don’t.
To upgrade your circle of influence consider creating or joining a mastermind group, taking someone you admire out to lunch, joining a community service group, or connecting with attendees at a live event or conference.
When you interact with people who are smarter, fitter, or wealthier than you, you’ll transform your life and improve your money mindset.