We have all made last-minute New Years Resolutions, but hardly anybody ever sticks to them. This is because changing your behavior is more complicated than simply deciding to do something different.
Just like following a diet or giving up a bad habit, your financial behavior is determined by several complex factors. All of these factors come together to make your money mindset – your rational, emotional, and mental patterns that determine how you spend and save money.
Do you know somebody that always seems to be broke, no matter how much money they make?
Do you find that you are always scared to spend money, even if you know that it’s a good investment down the line?
Making financial decisions is so tricky because it’s not just about money but your mindset.
We call the complicated combination of factors that come into play when you manage your finances your “money mindset.”
Some of these factors include:
According to renowned psychotherapist and author Joyce Marter, your psychological, emotional, and rational relationship with money can result in money blocks that prevent you from achieving your financial goals.
If you are used to not having enough, you might be in the habit of scarcity. This means that when you have an inflow of money, you might spend it very quickly because you are used to living with scarcity, and it has become a habit.
If this rings true for you, you might want to explore your thinking about why you are attached to not having enough. Give yourself permission to live a life of abundance, which includes letting go of guilt about having more than you need to simply get by.
It is normal to put a lot of energy into regret and worry about your financial wellbeing. However, try to shift your focus towards building a vision of the future that you want to create. Then develop an action plan to achieve that vision through goal setting.
Your money mindset can cause you to experience many emotions when you have to make critical financial decisions. High levels of emotion can disrupt your decision-making process and lead you to fall into old habits.
Keep your eye on your vision and detach yourself from negativity or unnecessary drama. Let go of fear, uncertainty, and doubt and stay on course to achieve your short, medium, and long-term goals.