What Is Your Personal Money Mindset?
What you believe about life will affect how it turns out. If you think that you have the capacity to become a doctor, you will study hard, pass your exams and go into clinical practice. However, if you don't think you are smart enough, you will never try.
The same applies to money. If you think that you will become rich, you probably will. By contrast, if you believe that you will always be poor, that too will become a self-fulfilling prophecy. If there's no chance that you'll ever have any serious money, what's the point of working towards it. You might as well just enjoy yourself now.
Financially bloggers rarely talk about money mindset, but it is so important. It's often the difference between having millions of dollars in the bank for retirement, and nothing at all.
But what is your personal money mindset? In short, it is your attitude towards earning, investing and spending money. It describes the types of decisions that you make with regard to spending and saving.
What Is A Healthy Money Mindset?
A healthy money mindset involves believing various concepts that will lead to a better life in the future. People with a healthy money mindset are typically generous with their money, particularly if they see somebody struggle. They also believe that it is possible for them to achieve their financial goals. They don't rule anything out. Furthermore, they have the ability to tell themselves not to buy something even if they want it. They can say no sometimes.
Getting into a healthy money mindset is a challenge. As humans, we have a tendency to compare ourselves to other people. We believe that we should be doing at least as well, if not better, than our friends.
How Is A Money Mindset Formed?
Your money mindset is formed by your experiences and personality.
If you wondered how to find a job after college and where your next paycheck was going to come from, you may have a scarcity mindset. This is the idea that there isn't enough money to go around and that you have to save every last penny, just to be safe. People who tried to get jobs during the financial crisis often worry about employment stability, future prospects, and the difficulty of finding a job.
Other people have similar experiences because of their family situation. They saw their parents struggle to make ends meet, so they resolve to never allow that to happen again. They go out into the world with a passion in their belly to make as much money as possible.
Marriage can also affect your money mindset. When you are single, you only have to look after yourself. But when you are married, you have to take care of a family too. And that can make you believe that you need to earn more and more.
It's critical to understand your money mindset. If you don't, you could be self-sabotaging, denying yourself the life that you could achieve if you just changed some of your opinions about money.