Mindset is definitely a common buzzword and topic of discussion these days. It refers to your personal perspective on subjects and can have a big impact on your successes or failures.
Your mindset impacts every aspect of your life and how you view and respond to challenges and opportunities.
"a mindset is a set of assumptions, methods, or notations held by one or more people or groups of people." - Wikipedia
According to Carol Dweck, Stanford psychologist, your beliefs play a crucial role in what you want and whether you get it or not. She points to two types of mindsets, Fixed and Growth, which refer to whether you believe qualities such as talent and intelligence are fixed or changeable things.
- A Fixed Mindset believes that you are born with your personal qualities and talents and you cannot change them.
- A Growth Mindset believes that you can develop and strengthen new skills and qualities with focus, commitment and hard work.
“The mind is just like a muscle - the more you exercise it, the stronger it gets and the more it can expand.”
When it comes to our financial success, we’re culturally wired to believe that only luck or a certain amount of effort brings about wealth and financial success. According to this way of thinking, we must either win the lotto, get an inheritance windfall, or bust our butts at our job or business hustle in order to become financially wealthy.
Think of your money mindset like emotional inertia – it can drives you to take action or keep you standing in place. With a positive (growth) money mindset, you are more likely to be decisive and take the steps that you need to take to succeed. Alternative, a negative (fixed) mindset causes emotions that prevent action:
- Fear or intimidation
If you don’t believe that you can succeed you will be less likely to act or even think about acting. Ignoring your finances just seems easier because to take action can seem insurmountable. Looking at it from this perspective, it’s not high debt, a low credit score or limited income that’s holding you back; it’s your belief that you can’t do any better.
So, how do you change or improve your Money Mindset?
- Recognize and stop negative (or self-sabotaging) thoughts in their tracks. Some common ones are:
- I’ll never get out of debt
- I don’t make enough to save
- I’ll never be able to afford that
- I’ll never make as much as so-and-so.
- Practice gratitude by recognizing and acknowledging the goods things in your life. Oprah puts it this way: “Be thankful for what you have; you’ll end up having more. If you concentrate on what you don’t have, you will never, ever have enough.”
- Acknowledge that you've made mistakes in the past and forgive yourself. If you can recognize the errors from the past, you are in a great position to take the lesson from the experience and move on.