Your money mindset greatly influences how you handle your finances and, ultimately, your financial stability.
You may be wondering what the heck is a money mindset? Great question! A money mindset is the beliefs and attitudes we have about money.
You see, most of us don’t give much thought to how we actually spend money. We just know we need or want something and then spend the money. Most times, leading us into debt and living paycheck to paycheck.
Honestly, I used to think debt and living paycheck to paycheck was normal. I thought being overwhelmed with debt was just part of adulting.
This unhealthy mindset led to frivolous buys and constant overspending, resulting in financial stress and strain on my marriage.
So, today we’re going to talk about how you can master your money mindset and take control of your finances for good.
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What is a toxic money mindset?
A toxic money mindset is a negative attitude about money that leads to behaviors that are keeping you broke. Here are the top five money mindset quotes we tell ourselves that can be extremely harmful.
I work hard, and I deserve this.
We tend to tell ourselves it’s ok to spend money because we work hard for it. This may be true, but not at the expense of debt. This kind of entitled thinking leads to spending money you don’t have.
I’ll never be good with money.
Practice makes perfect. If you never put the effort in to learn how to manage your money, you’ll never be proficient at it. The more you budget, save, and question every purchase, the better you’ll get at managing your money.
I just need to make more money.
Honestly, it doesn’t matter how much more money you make. If you can’t handle your finances now, you won’t be able to manage your finances with a pay bump. When you’re not budgeting, and your spending is out of control, you just have more income to spend.
Everybody has debt
Spending money we don’t have has become the norm nowadays. But as the old saying goes, “if everyone jumped off a bridge, would you?” That saying always seemed silly to me, but when you put it in the context of debt, would you go into debt just because everyone else was doing it? It seems even sillier.
You can’t take it with you when you’re gone.
That’s true you can’t take it, but do you want to live the life you have stressed because you can’t manage your finances. You can enjoy your life without digging yourself deep in debt.
What is the right mindset for money?
Having the right money mindset will completely change how you handle your finances. It’s a healthy balance between saving and spending.
How do I master my money mindset?
Here are the five secrets to help you master your money mindset and change your financial future.
Secret #1: Find your focus!
You need to figure out your ultimate why to change your money mindset. Decipher what toxic thoughts affect your money mindset, why you have them, and why you want to change.
What toxic money thoughts do you have?
Figure out how you feel about money? Do any of the harmful thoughts above resonate with you? Do you feel like you’ll never get ahead, or you’ll never make enough money? Does the idea of money make you physically ill? List all your negative thoughts about money.
Why do you have these toxic money mindset thoughts?
Our money mindset is influenced mainly by what we learned growing up and our environment.
“Genetics loads the gun, environment pulls the trigger.”Brené Brown
We may have learned how to manage our money from our parents, but our environment and emotional well-being ultimately trigger our spending.
So, figure out where your beliefs about money come from, so you can make a plan to change them.
Why do you want to change your toxic money mindset?
Next, you have to do some self-reflection. Why do you actually want to change your money mindset?
This may seem like a dumb question. But it’s something you have to ask yourself to change. This is probably the most important question because this “why” will keep you motivated to change.
For example, my toxic money mindset, which led to overwhelming debt and terrible spending habits, affected my marriage, family life, and mental health. I wanted and needed to change my mindset and spending habits for the well-being of my family.
Secret #2: Manage your money!
Managing your money is necessary to developing a healthy money mindset. To do this, you need to know your spending behaviors, create a monthly budget, and track your spending.
Look at your spending behavior
Start by reviewing 2-3 months of bank statements, and look at how you spend money. Then, break the spending into categories (housing, groceries, transportation, debt, saving, lifestyle, etc.) and total your spending in each category.
This was a huge eye-opener for us. We saw that we were just blowing our money on ridiculous stuff. Fast food was our definite pain point. You’ll probably be shocked at the unnecessary spending you’re doing too!
Budgeting every month is crucial for a healthy money mindset. A budget will help you organize and plan where you want your money to go. By creating a monthly budget, you’ll be able to do more with your money, like pay off debt, save money, or spend on what makes you happy.
Track your spending
Tracking your spending is going to keep you accountable to your budget. Every purchase should be written down; this way, you know you are keeping within your budgeted spending.
Secret #3: Start saying NO!
You need to set boundaries for your money. And just like you would with any boundary, you have to start saying no. Because if you never say no, especially to things you can’t afford, you’ll never be able to change your money mindset.
Stop using credit
You have to say no to those credit cards. Get rid of that mentality that you need them for emergencies. You don’t need credit cards for emergencies; you need an emergency fund.
Did you know Americans spend approximately $120 billion in credit card interest and fees every year (Consumer Financial Protection Bureau)? Banks are getting richer because we have become dependent on loans and credit cards to get us out of tight situations or buy things we can’t afford.
If you ever want financial stability, you have to say no to using credit cards!
Make a plan
Come up with a plan for how to pay off your debt. Prioritize your debt in the order you want to pay it off, and then start tackling those debts one by one.
This is where being proficient in budgeting and tracking your spending will be incredibly helpful.
Pay off debt
Put your plan into action. Find ways to cut your spending and ways to increase your income.
It’s not easy. Actually, it’s really freaking hard! But you can do it even if you’re broke. We did it on one income!
And trust me, with the work you put into paying off your debt, you’ll never want to go back into debt again!
Secret #4: Learn to be content!
Contentment is being truly happy and satisfied with what you have. If you never learn to find a sense of contentment, you’ll just continue to spend money to find it.
So how do you learn to be content? It can be challenging, but here are some things you can do to get started.
Finding contentment starts with being grateful. Every day, you should be counting your blessings.
Some days it may seem like you don’t have much to be grateful for, but try to find at least one thing. Slowly you’ll see a positive difference in the way you think.
Some ways to track your gratitude are…
- on paper with a journal or notebook
- on your phone with an app (I love the 5 Minute Journal app)
- through prayer or meditation
Embrace a more minimalistic lifestyle. Minimalism is getting rid of unwanted clutter, which can apply to many aspects of your life.
Take a Marie Kondo approach, and ask yourself does this bring me joy? If your answer is no, then thank it and send it on its way.
When you embrace a minimalistic lifestyle, your wants become less, which means you buy and spend less. We have never been happier with our minimalist lifestyle.
To find out more about minimalism, here are some helpful resources.
Declutter your mind space
We get so caught up comparing ourselves and our lives to others; it’s exhausting! Social media can be so superficial and toxic.
Everything looks perfect in the split second it took to take a picture. But, we don’t know what is happening in all the other seconds, minutes, and hours of their day.
So, stop trying to keep up with the Jones’ because they’re probably secretly trying to keep up with someone else. Therefore, live within your means, learn to be content and thankful for what you have, and love people, not things.
Secret #5: Be generous!
I believe that if you put good out into the world, good things will come back to you. The act of generosity changes how you think about money because you’re serving and thinking of other people first.
“Live like no one else so that later you can live and give like no one else.”Dave Ramsey
I love this quote by Dave Ramsey! This is why I love the Baby Steps so much because it’s about becoming financially independent and wealthy so that you can be outrageously generous.
You can still practice generosity even if you don’t have money to give. Here are some ideas.
- volunteer your time with an organization
- donate gently used items to those in need
- donate your old towels, blankets, and sheets to an animal rescue (they need love too!)
- help a neighbor in need with tasks around the house
- visit a nursing home or assisted living facility, and spend time talking with the residents.
A toxic money mindset can be very harmful to your finances. It can lead to debt and living paycheck to paycheck, and in today’s world, it’s pretty easy to get caught up in this way of thinking. Thoughts like I work hard so I deserve this or everybody has debt can leave you broke.
But, you can change your way of thinking by
- finding your focus
- managing your money
- saying no to debt
- learning to be content
- being generous
A healthy relationship with money will help you to become financially independent. When you master your money mindset, you can live the life you want without the financial stress.
Have you ever struggled with a toxic money mindset? Leave a comment below!