Skip navigation

Financial Tips

Six Steps to Creating a Positive Money Mindset

Little girl saving money to piggybank

Money is a tricky topic. Everyone needs it to survive, but if you don’t have enough of it, it can cause major stress. The lack of money or the presence of too much debt can cause a person to develop a negative and destructive thought process when it comes to finances. Once this way of thinking is instilled in a person’s mind, it can affect their finances in ways the person might not even be aware of. If you constantly live in a state of fear when it comes to money, you might sabotage your chance of making more or getting out of debt. Avoiding thinking about your finances completely can cause you to dig yourself into a deeper financial pit, which is why you need to shift your mindset. Below, you’ll find a few tips to help you create a positive money mindset.

Forgive Your Past Financial Mistakes

No one is perfect. Chances are you’ve made multiple bad financial decisions over the years. Perhaps you paid too much for rent because you fell in love with a beautiful house or you went on too many shopping sprees, and now your credit cards are maxed out. Whatever decisions you’ve made in the past are in the past. Yes, you might still be suffering the consequences of those mistakes, but you don’t have to continually beat yourself up over it. Money is tricky, and not everyone is taught how to manage it properly. A lot of people find their way through trial and error. The two most important things to focus on are learning from your mistakes and forgiving yourself.

You should also try to rephrase your thinking when it comes to the poor decisions you’ve made in the past. If you have debt, remember the dinners out with friends, remember the trips you took or the education you paid for. Your debt brought you joy, it created memories. Don’t romanticize it, but remember that it served a purpose. It’s not the enemy or a black void you’ll never get out of. It was there when you needed it, and now you can work to pay it down and create an even better life moving forward.

Understand Your Thoughts and Emotions Surrounding Money

You might think you understand your thought patterns when it comes to money, but taking a deeper look might provide some interesting insight. Try this exercise: For an entire day, after each purchase or financial decision you make, take a moment and write down your thoughts and emotions. What’s running through your head? How do you feel? Be honest and thorough. At the end of the day, go over everything with an open mind. You might find that certain aspects of your finances are stressing you out more than you thought, or perhaps a purchase you thought would bring you joy only brought fleeting happiness followed by guilt. You should in no way feel like you can’t spend money on yourself from time to time, but it’s good to honestly evaluate how your spending habits are affecting your mental health, thoughts, and emotions.

Realize That Comparing Yourself to Others is a Losing Game

Comparing yourself to others is one of the most dangerous things you can do in life, and the same is true in finances. First of all, comparisons are never accurate. The lens is skewed. You know everything there is to know about yourself, but if you’re comparing yourself to someone on Instagram, a movie star, or a fictional character, you’re literally comparing yourself to someone you know almost nothing about. Social media is a lie. You only see what people want you to see. They post the highlights of their life and financial journey and leave out the rest. For instance, you might see an Instagrammer posting about luxurious vacations, fancy clothes, and a beautiful home, but you don’t know how much debt is on their credit cards. You don’t know if they’re two months behind on their car payment or owe their parents thousands of dollars. And you’ll never know, because they won’t share that part of their journey with you. Yet you constantly see the darker side of yours, so you can see why comparing your entire story with only a highlight reel of theirs is deceptive and dangerous.

Even if you’re comparing yourself to friends or family members, you’re still in a similar situation. You can never know as much about them than you do about yourself, so you can’t fully understand their financial situation and the thoughts that go into tough decisions. Another downfall here is that when you compare yourself and find yourself on the losing end, you get discouraged. You’re focusing on the negative instead of finding the positive. You start to see your goals as unreachable. You focus on your flaws instead of how far you’ve come. Thoughts like these can set you back and cause you to make even more negative financial decisions in the long run.

Work on Forming Good Habits

Don’t shy away from your finances. Try, instead, to set aside time each week to go over your bills, budget, and spending habits. Highlight the areas you need to work on and congratulate yourself for any improvements. Avoiding an issue will never make it go away. Instead, put your fears aside and face the problems head-on.

Set realistic goals and reward yourself in small ways when you reach them. Your finances didn’t get out of hand overnight, and your success won’t appear that way either, so it’s important to set several small goals and celebrate each positive step.

Create a Budget That Brings You Joy

Budgets tend to make people nervous. They think of a budget as confining and restricting, but it doesn’t have to be that way. A loose budget can help you stay within your spending parameters and understand your boundaries while still allowing yourself the freedom to treat yourself from time to time. A good rule of thumb is to put half of your monthly income towards bills and necessities. Twenty percent of your income should be going towards paying off debt or building savings. That leaves thirty percent for you to use as you please. If you find that you’re unable to follow this pattern, it might be time to look at your monthly bills and see which ones you can lower or cut out altogether.

Remember to be Thankful

Be thankful for everything you have; it might not be as much as you want, but it’s what you have right now, and it’s worth celebrating. Be thankful to roof over your head, the job that provides you with an income, the car that helps you get around, the food in your fridge, etc. There’s always time in life to make more money and build a better life, but it’ll never be enough until you learn to focus on what you have with a grateful heart.Money shouldn’t control you or your thoughts. Instead, you should work to control your thoughts around money and in turn begin to get a better grip on your financial spending. Use these tips to get you started and watch as your thoughts and emotions on money start to have a positive effect on your life.

Download the App

Easy access on your phone.