BY LAURENCE SMITH, FINANCIAL ADVISER, UEM WEALTHDoes your money mindset have your back? Or, does it hold you back?
If you’ve never really thought about it, you’d be forgiven. When it comes to our financial success, we tend to focus on things like income, investments, and expenses. It makes sense to put our financial position down to how much we earn or spend, or the performance of our investments. But what about the role of your money mindset?
What is a money mindset?
A money mindset is your set of beliefs and attitudes about money. It shapes how you make financial decisions, how you perceive wealth, and react to financial challenges. Understanding your money mindset is important, because it can either support you in achieving financial success or hold you back.
There are various types of money mindsets, but they often fall into two broad categories:
Abundance Mindset vs. Scarcity Mindset.
Abundance Mindset: An abundance mindset is the belief that ample opportunities exist to earn, grow, and enjoy wealth. People with this mindset see the world as full of potential and possibilities. They tend to be optimistic about their financial future and are willing to take calculated risks.
Scarcity Mindset: A scarcity mindset, on the other hand, is the belief that resources are limited and difficult to obtain. People with this mindset often focus on what they lack rather than what they have. This can lead to fear, anxiety, and a reluctance to take risks.
Fixed Mindset vs. Growth Mindset
Fixed Mindset: A fixed mindset in a financial context means believing that your financial abilities and knowledge are static and unchangeable. People with a fixed mindset might think they are either ‘good’ or ‘bad’ with money and that this cannot be altered.
Growth Mindset: A growth mindset is the belief that financial skills and knowledge can be developed through effort and learning. Individuals with a growth mindset see financial challenges as opportunities to improve and grow.
Strategies to shift a negative Money Mindset
If you’ve identified that your money mindset might be holding you back, don’t worry! The following strategies can be used to help you to shift your mindset to a more positive one.
- Set realistic and achievable financial goals. Start with small, manageable goals and gradually increase their complexity. Achieving these goals will build confidence and encourage a positive mindset.
- Educate yourself on financial management and investing. Understanding financial principles and investment strategies can help reduce fear and build a sense of control over your finances.
- Practice mindfulness and emotional intelligence. Mindfulness can help you stay present and make thoughtful financial decisions. Emotional intelligence will enable you to manage financial stress and maintain a positive outlook.
- Seek professional advice. Professional financial planners can provide valuable insights and strategies tailored to your unique situation. They can help you navigate complex financial decisions and create a roadmap for achieving your goals.
Your money mindset plays a crucial role in your financial success – it should have your back, not hold you back!
By identifying and overcoming negative financial beliefs, you can create a healthier relationship with money and achieve your financial goals. Take the first step today by reflecting on your financial mindset and seeking professional advice to guide you on your journey.
Disclaimer
General Advice Warning – this is untailored, general advice. It does not take into account your personal circumstances. You need to decide whether it meets your needs. Laurence Smith is an Authorised Representative and UEM Wealth Pty Ltd is a Corporate Authorised Representative of Lifespan Financial Planning Pty Ltd (AFSL 229892). Laurence Smith may offer services through UEM Wealth and UEM Group. Accounting services are provided by UEM Group. Financial Services (financial product advice and dealing) are provided by UEM Wealth. To the extent permitted by law, although the same adviser may offer you services under the above business, each business is solely and separately responsible for the advice they each provide.
