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 got you to where you are. It’s primarily responsible for the financial success (or lack of it) that you already have. So, if you want your life to change, you must adjust your mindset.
What Is Money Mindset?
Your money mindset is the sum of the attitudes and ideas you bring to a situation related to your finances. It’s your mental habits for thinking about and responding to any financial circumstance; your previous financial experiences usually create them.
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 three tips and tools to dramatically improve your money mindset and have more financial success:
1. Make small changes over Time
Whatever lifestyle changes you want, it’s better to make small ones over time than huge ones. While that might seem counterintuitive, trying to do too much at once is why many people fail to achieve New Year’s resolutions.
For instance, if you want to exercise more or eat a better diet, it’s challenging to stick to a strict daily exercise program and start cooking three 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 weekly spending, setting up a retirement account, or figuring out your net worth.
Once you successfully accomplish a small financial change or goal, 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.
2. Practice gratitude daily.
A powerful way to achieve more financial success is to practice gratitude. Having gratitude 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 of the 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 refreshed in the morning.
- Improved overall health by boosting the immune system, reducing illness, lowering blood pressure, and having fewer aches and pains.
- More resiliency by recovering from adverse or traumatic events faster, including veterans with PTSD.
With 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 regularly.
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. Deep down in your core, they are what’s most important to you. After you identify your values, you’ll focus more on them daily 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 ensure 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. That’s an example of not aligning your spending with your values.
A wise tip is to identify your top five values, write them on a sticky note, and put it on your credit cards or in your wallet. 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 essential point about mindset is that you get influenced by the people you spend the most time with. They either lift you or bring you down.
Motivational speaker and personal development pioneer Jim Rohn said, “You are the average of the five 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 smarter, fitter, or wealthier people than you, you’ll transform your life and improve your money mindset.
