It doesn’t take much to know that your level of success in a given situation often hinges on your mindset just as much as your actions.
If you’re playing a sport, for instance, you probably won’t get very far if you decide ahead of time that you can’t beat your opponent. The same applies to approaching your financial health.
Maybe you tend to avoid your financial problems until they become too big to ignore. Or you might feel guilty about your debt but continue to overspend to maintain your lifestyle. Maybe you want to build some financial structure for yourself, but you simply don’t know where to start.
First, take a little bit of pressure off yourself. Believe it or not, your current money mindset (if it’s a negative one) isn’t totally your own creation. Influences shape the way we think about money — and if not checked, they can cause some bad habits.
Reshaping your money mindset so you can develop better, more consistent habits is the first step toward achieving financial health. It’s also not as difficult as it might seem.
Here are a few money mindset influencers and how you can take back the power in your financial journey.
Just as you might find yourself making coffee the same way as your mom or picking up vocabulary from an older sibling, family can have a big impact on the ways you view and manage finances.
And since many of us aren’t taught personal finance basics in the classroom as kids, much of what we know about money comes from what we glean at home.
That doesn’t mean you’re destined to repeat all your family’s mistakes, but it does give you some perspective.
Start thinking differently:
- Take time to evaluate your current money habits — how much you’re saving, how you’re managing credit card bills, what your budget (or lack thereof) looks like. Then try to trace them back to their origins.
- Identify some ways you might implement small changes that can bring you gains. Can you tweak your budget to track weekly expenses instead of monthly expenses? Can you drop some subscriptions here or there to save yourself $50 to $100 at the end of each month?
Find new methods that work for you today rather than continuing what you may have picked up years ago.
Whether you fall victim to impulse buys or get bitten by the FOMO spending monster, your feelings can easily guide your money decisions. The problem is that when the feeling evaporates, the financial fallout remains.
Particularly during times of high stress, it’s natural to want to seek quick sources of comfort. But giving in to emotional spending can be a quick way to fall short of your financial goals.
That’s where discipline comes in. You don’t have to cut out every fun purchase or splurge, but it’s important to incorporate some spending guardrails to keep yourself on track.
Start thinking differently:
- Set up automated transfers to your savings account each time you receive a paycheck, so you can save even before you spend.
- Use your credit card like a debit card, never spending more than you can afford to pay off in a day.
- Spend only with the cash in your wallet.
Know what your limitations are and set a game plan for yourself so your emotions won’t derail your hard-earned progress.
We all spend our fair share of time scrolling our favorite social media feeds and commenting on our IRL friends’ posts — but there are some sneaky mental and financial pitfalls to watch out for.
Allowing what you see on social media to influence your financial decisions is dangerous. No matter how small the influence might seem, be mindful of how your feeds can make you feel.
For one thing, much of what we see on social media doesn’t reflect everyday life. For another, unhealthy comparison is just a waste of your time. Obsessing over how a colleague was able to afford the down payment on a new home or envying an influencer’s jet-setting lifestyle is no help to you.
No, there’s nothing inherently wrong with seeing something online that you like and wanting it for yourself. But letting these thoughts take root and grow without proper perspective can lead to a harmful money mindset.
Start thinking differently:
- Review some of your feeds to determine if they’re producing some not-so-good feels.
- Set some realistic goals based on your personal interests and decide how you can reach them with responsible money management.
Once you identify some of your negative money mindset influences, you can work toward getting comfortable with some new, proactive approaches.
Ways to start your new money plan:
- Specifically define your goals and pinpoint how your money can better serve you over time.
- Look at your current financial picture and determine areas of opportunity where you might be able to save more or put more money toward debts. Consider a spending plan and automation.
- Work on your financial literacy by learning more about debt, savings, and investing from financial professionals and credible online resources.
- Establish some new low-effort habits: Start an emergency fund to secure a 6-month buffer of expenses, dedicate a percentage of your paycheck to start tackling high interest credit card debt, or start contributing a small amount to a retirement account.
A new mindset can help you reframe what’s doable, but really improving your situation comes down to hard work and sustained habits.
Recognize your influences, take control of your situation, and start forming the plan to achieve long-lasting financial health.
Kendall is a personal finance journalist for NextAdvisor in partnership with TIME. Previously, she was a finance writer and credit cards reporter at Bankrate, where she covered industry news and consumer advice. You can find more of her financial health advice on Twitter.
