Your money mindset is your unique, individual set of beliefs about money and how it should be used. It drives the decisions you make about handling your finances, specifically spending and saving.

Why is a Money Mindset Important?

The truth is the thoughts and beliefs we hold about money play a larger role in our financial success than we might expect. Personal finance author Rachel Cruze put it succinctly when she said, “What you believe about money, yourself and the world shapes how your life will unfold.”

Here’s the thing – when our money mindset is geared towards abundance, or the belief that we’ll always have enough wealth to go around, incredible things happen. Opportunities seem to present themselves readily, we focus on the things we can control, and we feel more empowered to create good habits and make lasting changes in our lives.

Sometimes, however, our inner voices usher us towards a mindset of scarcity, making us feel as if we will never have enough. Financial anxiety plagues us day in and out – and why? Because the scarcity mindset is built off fear rather than gratitude.

These varying beliefs lead to different emotions while dealing with finances. Let’s look at a few different stereotypes when it comes to dealing with money next.

Types of Money Mindsets

According to Erin Lowry, author of Broke Millennial: Stop Scraping By and Get Your Financial Life Together, Your money mindset… is how you both interact with and react to money.”

So, when thinking about money, most people have different ideas in mind. We’ll make use of four stereotypes from pop culture to explain different financial mindsets:

  • The Scrooge – a miser
  • The Gatsby or The Golightly – a spendthrift
  • The Banks Family – a frugal person
  • The Granger or The Watson – a researcher

1. The Scrooge

Ebenezer Scrooge from Charles Dickens’s Christmas Carol does not need much explanation. He is described as a wealthy but cold-hearted miser, clutching his money, not even helping those in need. He seems to have a money mindset of scarcity.

2. The Gatsby or The Golightly

Holly Golightly from Truman Capote’s Breakfast at Tiffany’s as well as Jay Gatsby from F. Scott Fitzgerald’s novel The Great Gatsby are complex and often misinterpreted fictional characters. However, thanks to the iconic movie adaptions starring Audrey Hepburn and Leonardo DiCaprio, both Golightly and Gatsby are the epitome of a spendthrift for many people.

That’s the key feature we’ll be focusing on here, assuming those characters have a mindset that money has to be spent at all costs. Often people with the Gatsby-Golightly mindset have a very emotional connection with money. For example, purchasing items makes them happy.

3. The Banks

Most people know the Banks Family from the 1964 Disney movie Mary Poppins. George Banks is a bank employee, teaching his kids about the importance of frugality as we learn from the song “Fidelity Fiduciary Bank”. At the same time, it’s stated on a sub-level note that the family has built wealth and lives an upper-class life. Telling from their clothes, their house, and the fact they employ household attendants, it’s clear they have a raised standard of living.

In other words: A Banks-type-of-person has a very well-balanced money mindset. At first glance, they might be spending more money than others on everyday purchases like clothes, but if you look a little closer, you’ll see that they prefer good-quality items over cheap products. That will save them money in the long run, which they like to invest, for example.

4. The Granger or The Watson

Hermione Granger from J. K. Rowling’s international best-seller series Harry Potter and the actress portraying her, Emma Watson, are huge role models for many young women. It was often stated that Watson was a perfect fit for the role of Hermione, as her cleverness and wit resemble those of the young witch. It’s no surprise that when it comes to money, Emma Watson does what Hermione Granger would do – she educates herself before she takes any financial steps (as we learn from this Forbes article.)

People with this mindset are very careful – they think twice about every penny before they spend or save it. With that said, the Granger-Watson-type is great at investing and building wealth.

Which Money Mindset Type Are You?

Now, take a second to think about which of these four stereotypes fits your own mindset. Would your friends and family describe you as penny-pinching, or are you spending money lavishly, creating more debt? Maybe you’re already embracing a frugal lifestyle or good at researching before making a financial decision.

Next, let’s think about your relationship with money. Not how it feels when it’s in your hands or how it sometimes hurts when you spend it – just the money itself.

  • Do you feel the need to hold onto your money, or do you prefer to spend it?
  • Could your connection with money use a little work, or would you say your relationship is healthy?
  • Do you feel overwhelmed or educated when it comes to financial questions like investing or building wealth?

These questions will help you get a sense of whether you might need to shift your money mindset to build a healthier relationship with money.

How to Improve Your Money Mindset

If your mindset needs some work, you’re in good company. The truth is many people have held their thoughts and beliefs about money for so long that they’re not even sure where they came from.

So, congratulations – recognizing your relationship with money could need a boost is half the battle. You’ll find more tips to change your money mindset in our next article, How to Change Your Money Mindset.