Most of us received standard, seemingly simple advice on money early on in life but for some reason, putting basic financial principles into practice is much easier said than done. “Spend wisely, save as much as you can, and invest the rest,” you might have heard. What’s so difficult about that? What many of us don’t acknowledge is the complexity and emotion that underpins all of your dealings with money and the importance of your money mindsets.
What is a money mindset? Simply put, your money mindset refers to the way you think and feel about money and it directly affects your financial habits, and as a result, the financial situations you produce. To take it a step further, your money mindset represents your subconscious beliefs about money and your attitude. Why is it important to evaluate what we believe about money? What happens when we begin to shift your core beliefs? And how can we go about doing so when we sense it’s time for a change? Let’s explore the answers to these questions to reclaim a sense of power over your financial well-being.
Let’s start with the importance of decoding the money mindset. As with so many aspects of life, the messages we internalize about money affect your thoughts about it from an early age. According to one of the most widely used clinical interventions used in the field of social work, cognitive behavioural therapy (CBT), the outcomes within your lives are determined by three things – your thoughts, your feelings, and your actions.
All three of these factors are interconnected and in the case of money, the thoughts or beliefs we have about it affect the way we feel about it. Your feelings about money will change your behavior towards it. According to the principles of CBT, if we’re able to change one of the three factors discussed above (in this case, your thoughts about money), we can change the way we feel about it and in effect, your emotional reaction to it, and your financial habits. To begin the mental shift that could potentially change the trajectory of your financial situation for the better, we must first be aware of your money mindset.
So, we invite you to think back to where it all began for you. As a child, what were you taught, directly and indirectly about money? Did your parents complain constantly about how there was never enough? Were you constantly taught about how hard you need to work to obtain enough money to meet your basic needs? What about people with money? Were you taught that they’re evil and greedy or the opposite? As simple as those questions seem, the answers to them will indicate why you’re in the financial situation you’re in now and they also hold the key to changing them – but how?
Luckily, there are many ways to improve your money mindset. First, if you have a mindset centered around scarcity, you might believe that there is never enough money, that there are very few opportunities to make more, and that for some reason, you don’t deserve a positive financial situation. The opposite of that is a growth mindset. Under this mental framework, you believe that opportunities are everywhere, that money comes from all sorts of different places – some not requiring back-breaking work. With a growth mindset, you believe that you deserve a solid financial situation. The next time to sense a thought about money coming on, think about what category the thought fits into. If you sense yourself operating from a scarcity mindset, simply reframe it to be more positive. Continue this until a growth mindset is second nature.
As the world exposes many of us to financial insecurity, surely, finances are heavy on many minds. For this reason, it’s time to reevaluate our current mindsets and behaviours in order to change our habits for the better. Advanced Home Care Solutions is a community care company dedicated to providing high quality care services to individuals and their families. Contact us to learn how we’re restoring a sense of security for older adults in need.