How changing the way you think saves you money
We all have ways of thinking that govern how we show up in our lives and this is called a mindset. According to Webster’s Dictionary a mindset is a “mental attitude or inclination; a fixed way of thinking” and this mental attitude influences the way we see ourselves. When it comes to our financial lives we have so many deeply held beliefs about our abilities and our self-worth that we begin to believe that our circumstances are permanent. Therefore, it is important that we understand what our money mindset is in order to improve our finances. There are two types of mindsets a Fixed Mindset and a Growth Mindset. A fixed mindset believes that there is no way out and that we are stuck in our current circumstances. A Growth mindset believes that there is always a positive solution and is focused on learning and improving.
Take the Money Mindset Assessment below to determine what your pattern of thinking is. Once you understand your strengths and weaknesses you will be more equipped to live a more abundant life. Please note that there are no right or wrong answers. This is merely a barometer of where your thoughts and beliefs are today, and once you know what your mindset is you will be able to start the exciting work of becoming the person you desire to be.
Circle one statement from each column below that most closely resembles your current beliefs. The the column with the most items circled is your dominant mindset.
|Fixed Mindset||Growth Mindset|
|I never have enough money||I always have enough|
|I can’t afford it||I will budget for it|
|Other people are luckier than I am||I create my own luck|
|I can never save||I have a savings plan|
|I have more month than money||My budget works for me|
|I will never be able to retire||I invest in my future|
|I will never get a better paying job||I always seek new opportunities|
|Budgeting just doesn’t work for me||I have a system that works for me|
|I live always paycheck to paycheck||I tell my money where to go|
|I focus on reducing debt||Focus on income growth and saving|
|Money is hard to manage||I’ve learned to manage my money|
|I focus on what I don’t have||I focus on my goals|
|I don’t need to learn about money||I learn new money tips constantly|
|Money is a source of stress||Money is a source of joy|
|I am not good enough||I am good enough|
Now that you know what your money mindset is here are some actionable steps that you can take to improve your thinking. Regardless of which mindset you scored higher in, be patient with yourself. This assessment is not meant to give you a reason to beat yourself up but to show you a pattern that you have subconsciously been following in order to give you a clear path for self improvement.
If you scored higher in the fixed mindset category you can modify your thinking by changing your self talk. Limiting beliefs can only survive if we agree with them so starve them by redirecting yourself every time a negative thought pops into your head. Once you start paying attention to your thoughts you will begin to see just how often you say negative things to yourself regarding your finances. If a friend excitedly shares how much fun they had on their recent vacation and your mind immediately says “she is so much luckier than I am” or “I could never afford to go on that type of trip” you that is your automatic limiting belief kicking in. When this happens I want you to immediately rephrase that thought in your mind to “I can go on that type of trip” or “I will budget for a similar trip for next summer”. It may feel unnatural when you first begin this process however, once you start retraining your brain you will find that you will feel less envious, sad, or angry about your own situation and instead you will feel excited, hopeful and eager to create a plan that fits your budget.
If you scored higher in the growth mindset category in this assessment congratulations! Don’t celebrate too much yet, you are not off the self-improvement hook because there is always room for growth. Take a closer look a the limiting beliefs that you still have and focus on retraining your brain in that area. You may think that this process will be a little easier for you because you are already primed for this way of thinking but don’t be surprised if it is a bit of a challenge. I have found that when we feel over confident in one area of our thinking we tend to avoid those things that are still challenging. Approach this exercise with the clear understanding that it will be just as much work retraining your thinking as it was originally.
Financial mastery is 80% mental and 20% knowledge so the first step in improving your financial wellness and achieving your financial goals is identifying the patterns that you have developed over time and working to reshape them. Doing this will put you well on your way to financial freedom.