Creating a healthy money mindset comes from first understanding and developing a good relationship with money.
It’s not something that we often take the time to do, but if you sit down and trace back where your money habits first come from, you’ll have a much better understanding of where you’re heading financially.
To start this process, take out a pen and paper and jot down the answers to these questions:
- What is your earliest memory of money?
- What is your parent’s attitude towards money like?
- Did you live with a scarcity or abundance mindset?
- When did you start to become more financially independent and how did this feel?
Do you have a healthy money mindset?
Now it’s time to read back and reflect on what you’ve just written.
Does it make sense? What realisations did you make? How did it feel to think back to your childhood? Can you see more clearly now where your attitude and behaviours towards money have come from?
More often than not, our behaviours are ingrained from a young age and this usually comes from our parent’s or primary caregivers.
Adults often think that kids “don’t understand” or “won’t notice” issues or certain behaviours around money – but this isn’t true! Kids are like sponges – absorbing everything around them. By the time they’re just 5 years old, they’ve already picked up on your attitude towards money and are likely to repeat your habits.
So now is a great time to start making those positive changes towards a healthier relationship with money to change your money mindset!
Assessing how money makes you feel
Now that you’ve identified where your money habits have come from and where they could be heading – it’s time to assess how money makes your feel.
- Does your current financial situation make you feel empowered or stressed?
- Do your financial goals seem like a distant dream or a reality on the horizon?
- Overall, are you happy with your current spending patterns or do they make you feel secretly guilty?
The answers to the above questions will give you an understanding as to how positive your money mindset is right now. And don’t worry if it doesn’t feel good – there are ALWAYS steps you can take to regain your financial power and to get you on the right path.
A healthy money mindset starts with mindful purchasing
It’s so much easier to control your expenditure than it is to control your income (unless you have a super awesome boss who wants to keep giving you a pay rise!). The easiest way to approach this, is to stop yourself every time you’re about to buy something that you might not really need.
Whilst this might sound like a party-pooper, taking a mindful approach to your expenditure really can make the difference between reaching your financial savings goals and staying “stuck” in money limbo.
If you’re susceptible to impulse purchases, then you may be using your money to make you feel (temporarily) good. This isn’t good for you long-term, or good for your bank balance either.
Instead, look for “treats” that are low-cost or free that can give you the endorphin hit.
If you’re tempted online, delete the apps that make it way too easy to buy. Take off one-click purchasing and DO NOT SAVE your credit card details on your phone or compuer. AND NEVER, EVER, USE AFTERPAY (or other similar BNPL services!)
Take regular action to stay in charge
Being truly honest with yourself about your finances and how you feel is one of the hardest parts of getting started. But it’s key to financial happiness and creating a healthy money mindset.
Now, it’s time to take consistent action. For instance, every month, the Wealthy Self team hold our ‘Budget & Biscuits’ meeting. We schedule this in for the 1st of every month to talk about our budget and expenditure from the month before. Doing this makes each of us accountable for our spending and allows us to dive-deep into where our money is actually going… And whether we did really need to buy everything on our list!
Some things you can do right now, to develop a healthy money mindset are:
- Get real about your expenses and book in your own monthly Budget & Biscuits meeting
- Sign up for our Free Grow Your Future Guide (complete with extra Budget & Biscuits guide too!)
- Give yourself an expenditure (not savings) goal each month and stick to it
- Think about your ultimate financial goal and create a vision board to keep you on track and inspired
- Book in a Free Discovery Chat with Wealthy Self to get your finances optimised and organised
- Delete all the shopping apps, take off your credit card details and delete one-click payments
By using these first small steps, you can start to create your long-term healthy money mindset. Eventually you’ll completely re-frame your relationship with money.
This is an edited version of an article that was originally published on Wealthy Self. It contains general information only. It should not be relied on as finance or tax advice. You should obtain specific, independent professional advice from Wealthy Self or another registered financial adviser in relation to your particular circumstances and issues.