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Money Mindset

Change your money mindset

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The way you think about money has a direct impact on your financial situation.

You can make seven figures a year and still fail to pay your bills on time. You can have an in-depth knowledge and understanding of personal finance and still make destructive financial decisions. You can know all the right money moves to make and still make all the wrong ones instead.

That’s because the way you interact with your money is strongly driven by your emotions rather than logic or rationality.

Your money mindset is the way you think about your money. It’s the feelings, thoughts and biases you’ve consciously and subconsciously developed about money throughout your life. You’ve been learning and internalizing all kinds of money messages since before you can even remember – from parents, other family members, friends, and even the media.

Today, the money habits you’ve formed and the actions you take with your money are directly related to your thoughts and feelings about money. 

Understanding how your thoughts impact your finances is critical. Your money mindset forms the foundation that your entire financial life is built upon.

Negative money mindset

Because our thoughts influence our actions, having a negative money mindset can create obstacles that negatively affect your financial health. A negative money mindset can prevent you from achieving financial goals or even taking the time to set them.

A negative money mindset drives self-sabotaging behaviors instead of supporting beneficial money habits.

Let me give you an example.

We’ve all been frustrated with our finances at some point. This is a given. Most of us can also relate to having an unexpected expense pop up when we’re least expecting it. Car repairs, emergency travel, or medical bills are incredibly common but no less inconvenient.

However, the way we respond to these kinds of financial events is central to our overall financial situation.

Someone with a negative money mindset might see an unexpected expense as reinforcing. Of course their car broke down and of course they’re struggling to pay for repairs. They may believe that it’s impossible to get ahead and, thus, getting ahead becomes impossible. Instead of looking for a solution, this person focuses on the problem.

This kind of limiting belief leads to limiting behavior. It will likely result in disengagement; someone who is disengaged from their finances literally can’t get ahead because managing money well requires the opposite of disengagement. It requires deliberate action.

simple feedback loop

Here are a few more examples of this kind of thinking in action:

  • Money mindset: I’ll never get out of debt.

    Money habit: You focus on what you owe rather than what you can earn.
  • Money mindset: The stock market is rigged (or overwhelming).

    Money habit: You spend any extra money you earn instead of saving for retirement.
  • Money mindset: Talking about money is impolite (or leads to arguments).

    Money habit: You don’t set or discuss financial goals with your partner.

Someone with a negative money mindset focuses on the problem. Someone with a positive money mindset focuses on the solution. They ask – what can I do about it?

Positive money mindset

If you have a positive money mindset and understand that money is a tool and not an end goal, you’re significantly more likely to experience financial success and much less likely to experience financial stress.

A positive mindset begins with gratitude; in terms of money, you’re almost certainly already positioned better than the vast majority of people worldwide. As Investopedia reported, “An income of $32,400 per year would allow someone to be among the top 1% of income earners in the world.” (Not convinced? Check out this website.)

Step 2 is recognizing your current money mindset. This requires awareness. Think about the ways you’ve reacted to various financial events in the past and how your biases might have shaped your reactions and behaviors.

  • What did you learn about money while growing up?
    • There is never enough money
    • Money causes problems
  • How does the word “rich” make you feel? The word “poor”?
    • The rich get richer and the poor stay poor
    • Rich people are snobs
  • How does talking about money make you feel?
    • Talking about money is rude
    • I’m too ashamed of my debt to tell anyone
  • How does spending money make you feel? What about earning it?
    • Money burns a hole in my pocket
    • I work hard; I deserve to spend money

Then ask yourself: how do these beliefs serve you – or not serve you – now?

Through this process of checking in with yourself, your focus will shift to the actions you can take to improve your financial life. You’ll begin to see opportunities for growth rather than reasons you won’t succeed.

Change your mindset and your finances will follow

If your primary focus is on whatever is wrong with your financial situation, you will forever be missing the point. Paying attention to the negative you won’t motivate you to do something about it – it will keep you stuck in your current patterns and continually return you the same results. Instead, your focus needs to be on finding solutions.

Take some time to determine what money beliefs you have and which ones need to change. Pay attention to how you feel and what you tell yourself whenever you interact with your money, including when you:

  • Get paid
  • Pay bills
  • “Splurge”
  • Give or receive a gift
  • Imagine asking for a raise

All of your responses point to a deeper “money script” that guides your money habits. (For more on money scripts and underlying reasons for your financial behaviors, I highly recommend reading Brad and Ted Klontz’s book, Mind Over Money.)

Then determine which money habits you need to build and which ones you need to break in order to get the results you want.

One of the most important things you can do for your finances is to sit down and figure out your values so you can determine your why. You’ll never turn your financial situation around unless you’re absolutely clear on why you want to – why does getting out of debt matter to you? Why do you want to save for a home? Why are you pursuing financial freedom?


Taking control of your finances is absolutely possible. I know because I did it. You can do it too.

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