How to Change Your Money Mindset for the Better

A Woman Holding an iPhone and Cash Money

You’ve probably heard this phrase before: You are what you think. Well, it turns out the same thing is true for money! Your money mindset will determine how much you earn and spend and how much of it you keep.

If you’re like most people, your view on money is greatly influenced by your upbringing and the money concepts you were made to believe growing up.

Most of us were introduced to the same sequence of life events: going to school, moving on to college, and then finding a job. This particular format made us think that once we found a job, we’d be set for lifeboy, were we wrong!

The reality is that most of us who are lucky enough to have found jobs live from paycheck to paycheck. That means having enough money to pay the bills, go out a few nights, and possibly travel once or twice every year.

But you know you’d want more out of this life if you had the chance. You want to try out new dishes at fancy restaurants without having to live on instant noodles for the next few days. You want to travel more, fly business class, and stay in hotels with more than 3 stars—and still have enough funds to save and invest!

So how can you make this happen? It’s simple, really: change your money mindset!

In this article, we discuss what a money mindset is and how changing it can help you improve your financial future.

What Is Money Mindset?

We’ve all heard the phrase “money mindset,” and we may have a vague idea of what it means, but what exactly is money mindset? Let’s break down this concept.

Money mindset is your attitude toward money. It refers to how you think about and use money—so it’s all about how you feel about having it, spending it, and saving it. It’s the lens through which you view your financial goals, priorities, and decisions.

Your money mindset can be either positive or negative—in other words, optimistic or pessimistic. Now let’s take a closer look at these two concepts.

Positive Money Mindset

A positive money mindset is what helps you achieve prosperity and stability.

If you have a positive money mindset, you see money as an asset and a tool for growth. You see the value in saving and investing, and you understand that it takes time to achieve financial freedom.

You can also make smart decisions about spending and investing your money and feel confident that you’ll achieve your goals.

Negative Money Mindset

If you have a negative money mindset, you might think that life is unfair and that the odds are stacked against you. You feel like you can’t make it on your own and always wait for things to fall into place by accident.

A negative money mindset also causes you to make bad decisions about managing your finances—which can lead to financial insecurity in the long term.

The Benefits of Changing Your Money Mindset

When you’re struggling with money, it can be hard to see a way out. You may be stuck in the cycle of earning and spending and wondering if you’ll ever get out of debt.

But here’s the thing: you can change your mindset about money. And when you do, your life will change for the better in every way.

Changing your money mindset can help you feel more confident and capable in all aspects of your life, not just financially.

Here are some of the benefits that can come from changing your money mindset:

A Stronger Sense of Self-worth

Once you have a positive relationship with money, it becomes easier to reach your financial goals and feel comfortable with where you stand financially. You don’t have to worry about money because it doesn’t control you or dictate what happens next in life!

Better Financial Decisions

When you have a healthy relationship with money, it’s easier to make smart choices about your spending habits. You won’t be so quick to spend money on things that aren’t worth it, and you will save for important investments such as retirement or college savings for your children.

Confidence In Your Finances

Changing your money mindset helps you believe in your ability to handle your finances. When you have self-confidence, you’re more likely to take risks and make decisions that will help you grow your wealth.

Improved Mental Health

When you have a negative attitude toward money, it can affect your whole outlook on life. You might think that all you’ll ever be able to do is scrape by and make ends meet.

Changing your money mindset will help you feel more empowered and less stressed about finances. You’ll know what you need to do to achieve your financial goals and have the tools to make them happen.

Improved Relationships

If you’re in debt or having trouble paying off bills, it can be difficult to maintain healthy relationships with friends and family members who don’t share your financial situation.

By changing your money mindset, you can start feeling more confident about your finances, which will radiate into all other aspects of your life!

You’ll Be Able To Pay Off Debt Faster

When you change your money mindset, it will become easier for you to save up and pay off debts quickly—like student loans or car payments.

Your old thinking might have been that saving was boring and frugality was depressing, but now you know that small amounts saved over time can add up to substantial savings.

7 Qualities of a Positive Money Mindset

The truth is that the way you view money can have a profound impact on your life.

Your thinking on money matters directly impacts what you do with your money and how much wealth you accumulate over time.

If you want to build wealth, it’s important to change your money mindset from one of scarcity to one of abundance.

Here are seven qualities of a positive money mindset:

1. Optimism

A positive money mindset is optimistic by nature. People with this mindset believe that they can achieve their goals — even if those goals seem out of reach.

They also believe that no matter how bad things get in life, there will be good times again. This optimism helps them stay motivated when times are tough and helps them bounce back when setbacks occur.

2. Confidence

Confidence is key when it comes to financial well-being because it provides the courage and strength to take action when needed. People with a positive money mindset feel more secure about taking risks or making decisions that could affect their finances.

3. Focused On Progress, Not Perfection

People with a positive money mindset focus on making progress rather than being perfect. They know that success is a process, not an event.

Having positive money habits doesn’t mean you never make mistakes or have setbacks. It means you can move forward confidently even when things don’t go as planned. You understand that setbacks are temporary and that there will always be another opportunity to succeed.

4. Proactive

People with a positive money mindset are proactive. They do not sit back and wait for things to happen but take steps toward their goals and take charge of their lives.

5. Open-minded

Having a positive money mindset also means being open-minded. People with this mindset don’t have preconceived notions about what success looks like or how it should be achieved. Instead, they embrace new ideas and experiences as opportunities for growth and improvement.

6. Gratitude

A person with a positive money mindset knows that gratitude is one of the key ingredients to happiness.

When we are grateful for what we have, we open ourselves to more abundance in all areas of our lives.

Gratitude also helps us feel safe and secure even when things get difficult because there is always something good to focus on.

7. Embracing Abundance

Many people have a limited view of the world—they see money as something scarce and struggle to see beyond their own financial situation.

However, when you start to embrace the idea of abundance, you realize that there are plenty of resources in the world for everyone.

5 Ways To Create a Positive Money Mindset

How we go about our finances is deeply rooted in the mindset we are accustomed to. Therefore, transforming this mindset is a great step in improving how we deal with financial matters.

Here are five tips on how to start your transformation.

1. Revisit the Way You Talk to Yourself About Money

The story we tell ourselves daily becomes our very life, so be mindful of your script. Examine your inner dialogue and see if you’ve been too hard on yourself regarding money matters.

Transform this inner chatter by adopting more hopeful and positive insights. If you’ve been beating yourself up for the student loan debts you haven’t finished paying off, try focusing on how much you’ve paid the next time you think about it. It’s simple, but it’s a start.

2. Always Remind Yourself That You Are Treading Your Own Financial Journey

In this day and age, when we have all-day access to the life of others — or at least the way they curate it online, it’s easy to feel a pang of jealousy seeing your feed filled with travel photos, weddings, and new purchases.

Social media has been notorious for making people feel depressed, so never lose sight of the fact that you’re on your own financial journey. If you do, you might end up spending money on things you don’t need just to “keep up.”

3. Avoid Emotional Spending

Speaking of spending money on things you don’t need, impulsive buying messes up your budget, making you lose control over your spending.

Therefore, the next time you find yourself scouring online shopping sites at the end of a very stressful workday, stand up and take a walk instead. Remind yourself that buying a second parka jacket (which will probably end up sitting unused at the back of your closet) will only stress you out more down the road.

4. Change Your Debt Mindset

It may be hard to have a positive mindset about all the money you owe, but you can give it a try if it means lifting the weight off your shoulders somehow.

Decide that you want to get out of debt soon by making a debt plan, having action items, and setting personal deadlines. 

Create a tracker of your progress in paying off your debt and view it exactly like that: progress. You are moving forward and out of debt, and soon enough, you will have more funds to move around with.

5. Focus on What You Have, Not What You Don’t Have

If you feel like you’re not making enough money or your expenses are too high, it’s easy to forget the good things in your life.

Do you have a loving family? A good job? A nice home? The ability to eat out once in a while? Focus on those positive aspects of your life instead of dwelling on the areas that aren’t so great. You’ll soon find that your outlook on money will improve, and your finances will be healthier as well!

Bottom Line

Changing your money mindset takes effort and courage, and the tips mentioned above can get you started.

In a nutshell, they emphasize that to unlearn negative views on money, you must stay on top of your inner dialogue and thought patterns concerning your finances. Doing so leaves room for more productive and positive ideas for improving your financial situation.