Money Mindset: What It Is And How To Build A Better One

A money mindset is your unique, individual set of beliefs about money and how it should be used. These beliefs guide your financial decisions, often expressing themselves through your spending and saving habits.

Why is a money mindset important?

The beliefs you hold about money have a significant impact on your financial success. As personal finance author Rachel Cruze points out, “What you believe about money, yourself, and the world shapes how your life will unfold.”

A key aspect of a healthy money mindset is having the ability to spend money but being okay with the decision not to. If it seems like your relationship with money could use some improvement, we’re here to help.

How to improve your money mindset

It’s okay to realize that your money mindset hasn’t been benefiting you. Don’t get caught up—your challenge now is building a better one. Here are five tips you can start implementing immediately.

1. Get your budget in check

If you’ve never managed a budget, there’s a chance it could feel restricting when you begin. Rather than think of the downsides, appreciate the priceless things a well-crafted budget provides: security, confidence, and freedom from financial anxiety.

Visualize how you’ll feel when you’re certain all your expenses are accounted for. Once your finances are in order, you’ve taken the first step in building a better money mindset.

2. Check in with yourself before making financial decisions

Once your budget is in check, you’ve taken care of the logical side of your money mindset—but it won’t take the emotional aspects into consideration. Practicing mindfulness can help you here, especially if you sometimes struggle with guilt after making a purchase.

So, next time you see something you want to buy, take note of your immediate emotional reaction. Once that wave of excitement or desire passes, try your best to engage your logical mind. Ask yourself questions like:

• Do I actually need this? Why?
• Will this purchase meaningfully improve my situation?
• Was my life lacking before I knew this existed?

As you avoid the urge to buy things you don’t need, your money mindset (just like a muscle) will grow stronger.

3. Start reading

Some of us struggle with our money mindsets because we never learned how to build a healthy one. Fortunately, countless authors have set out to change that, working to shift their readers’ beliefs about money for the better. Here are a few of our favorite selections:

•          Mindset: The New Psychology of Success by Carol Dweck

•          Secrets of the Millionaire Mind by T. Harv Eker

•          The Psychology of Money by Morgan Housel

As they say, knowledge is power—and the shift in perspective these books provide is all you need to start building a better money mindset. If you prefer listening over reading, check out our list of 5 top-rated financial podcasts instead.

4. Start writing

When we focus on what we lack rather than what we have, a negative money mindset is the typical result. A gratitude journal can be effective in keeping the positives in mind.

Gratitude doesn’t have to be the only thing you write about, however. Through journaling, you can also learn more about yourself and where your money mindset comes from. We’ve included a few prompts for you to get started:

•          What’s your personal definition of financial success? Why?

•          What’s your ideal way of generating income? What’s keeping you from doing that?

•          What barriers keep you from feeling financially confident? How can you remove them?

A challenge for you: For a week, spend 10 minutes journaling about your money mindset every day. See how quickly you gain a deeper understanding of the beliefs you hold about money, where they come from, and how you can change them.

5. Keep your financial end-goals in mind

Keeping your financial end-goals in mind is crucial when changing your money mindset. The more connected you are with your destination, the easier it’ll be to stay focused as you make progress toward it.

As you start defining your goals, try creating a vision board to keep them top of mind. This board will serve as a visual reminder of your aspirations. When temptation to go off course comes around, your vision board helps you remember why each goal is important to you.

By putting your vision board someplace you’ll see it every day, you’ll create the sense of accountability needed to achieve your dreams—and a money mindset you can be proud of.

This article is for educational purposes only and is not intended to provide financial, tax or legal advice. You should consult a professional for specific advice. Best Egg is not responsible for the information contained in third-party sites cited or hyperlinked in this article. Best Egg is not responsible for, and does not provide or endorse third party products, services or other third-party content.