How to Determine your Money Mindset

We all have been hearing about the important of money mindset lately. Basically - what are your views of money & its relationship to you, and do these beliefs impact your financial wellbeing?  

If you are scarcity mindset vs abundance mindset - does that have an affect on your ability to manage money? 

In this episode - we break down how to determine your mindset & a few ways you can help break through the cycles! 

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Transcript

00:00 Welcome back to the Confident Dollar Podcast. I'm excited to have you guys back. Thanks for tuning in. I know it's been a little bit of time between getting these recorded.

00:11 I took some time off during the holidays. My kids were off school. I just wanted to take some time off to be with them and you know get that refresher ready to start the new year So we're back recording and have some good topics I think lined up for kind of the first part of the year to get us set and

00:30 ready and moving forward with for a successful 2024 with money starting today were going to talk about mastering your your money mindset for your financial freedom so I would assume you've heard money mindset being talked about or thrown around recently as its definitely been more of a trend when it 

00:52 comes to talking about money than I think previously you know its like you have all the information in the world about what you should do with your money and in the end still not do it and its like ok why like where where is that coming from why is that happening I have the knowledge why can't I actually

01:10 pull the trigger and get this done and get my finances in order well its because we all have a mindset around money predisposition belief system about money and how it affects us and how we relate to it so its become this new thing lately that I've seen a lot more is addressing your money mindset and

01:32 figuring out how do you relate to money how do you believe about money what do you believe about yourself and your relationship with money in order to understand how to actually be more successful with managing your money and meet your long term goals.

01:46 So again today on the confident dollar podcast we are talking about your money mindset the impact of money mindset on your finances and how to assess your money mindset so we're going to get into all of that so yeah thank you for joining and I hope this is helpful for you as we kind of dive into this

02:04 information so impact of of mind mindset on your money choices again if knowledge was the only thing you needed to get this done more people would be doing it right I mean it's the same thing with eating healthy like we know we need to eat healthy we know it's important we know it's important for our

02:27 bodies for our life for our longevity but then when the yummy thing is in front of us we want to eat it and it's kind of like nevermind forget it for right now right and then those can lead and stack and build habits that are unhealthy and the same thing comes with money like you know imma sitting if

02:44 youre listening to this you know what you probably should be doing at least a little bit with your money maybe you dont know every step clearly but you know a little bit but you know youre not doing what you should be doing because its hard to break out of the unhealthy cycle into the healthy cycle sometimes

03:00 those first steps are the hardest but a lot of that is just understanding why you view it that way getting past that first step is understanding yourself and what you view and what you believe so our relationship with money is complex its its been influenced by a lot of things its influenced by our culture

03:19 what we see what we what we take in all the time and when we take in so much information we take in so much information we don't need what other people are doing what how other people are spending the cars they buy the houses they buy our relationship with money is is influenced by our beliefs how we

03:34 grew up our experiences its shaped our lifestyle and our well being and our our view of money and our relationship with money so its kind of like lets unwind that lets back up a bit and see you know how are you raised what did you hear talked about money and how has that impacted you to this point when

03:55 it comes to your financial goals because saving money isn't just about building wealth it's about having financial freedom which means you know financial freedom is just like that peace of mind of knowing you are where you should be and whatever those goals mean are for you and it's gonna look different

04:14 for everybody you know having like security or just having endless opportunities and uhm things that you've been striving for so Forbes actually noted that early experiences with money such as just witnessing an argument uhm about money can can trigger emotions or anxiety or resentment that you actually

04:40 carry out through your life. So if you witnessed your parents arguing about money or maybe it was a lot of like we cant afford that, we cant afford that, we cant afford that or uhm and maybe you did grow up with not much money or with a single mom who worked multiple jobs just to be able to afford to

04:55 make ends meet uhm those are things you carry throughout your life and thats shaped how you view money So its really important to understand how you personally view money and if you're married its especially also important to understand how your spouse views money because if you money is a team effort

05:13 and if you don't understand each other and what you're what you're playing with basically uhm you're gonna have a whole lot harder time reaching out those goals uhm so you need to understand yourself take some time to understand yourself and you know help understand your spouse and what they believe 

05:28 as well how they were raised what their thoughts are so lets dive into a little bit of your mindset uhm understanding your money mindset uhm and I would say there's a kind of some questions or phrases I'm just going to pose to you of like for you to think on and see how this uhm you know what you think

05:46 about these specific things so uhm what do you think you can and cannot do with your money? Okay think on that uhm how much money do you think you deserve a lot a little kind of answer that question how do you believe you should manage your money are you you know we've heard this are you Im a saver Im

06:08 a spender uhm or some of you are just super like theyre givers they love to share what defines you what would you say you are are you a saver or are you a spender Ive seen a lot of marriages and I feel like its like you have the clean one and you have the not clean one I feel like a lot of times that

06:21 is in marriage its like you have the saver you have the spender one of you is probably one and your spouse is probably the other so which one which one are you and and being none of these or being one specific one of these is not better than the other they I would actually say all have their positives

06:37 and negatives because youre going to really tilt one way or the other and the other way makes you uncomfortable but understanding where you land there is an important thing to know how do you believe you should manage your debt your what is your ability to grow your wealth do you think you have that 

06:52 ability do you think you deserve it do you think you can do it and uhm what is your overall financial confidence when it comes to your you managing your money so they're kind of good places to start and think through when it comes to kind of trying to understand yourself and your money mindset the other

07:09 thing i would say kind of the two tied groups of people and this isn't just with money this is outside of money as well is there's two different mindsets that you can have in life right and you've probably heard it so this is not going to be a surprise but you're going to have a scarcity mindset mentality

07:23 or you're going to have a abundance mentality so again which one are you which one do you lean towards and maybe specifically this is different depending on what subject youre talking about so when it comes to money which one do you specifically lean towards and again neither of these i mean i would 

07:43 say scarcity is going to obviously trend to more negative most of the time but it doesn't mean that abundance doesn't have a few drawbacks you need to be careful of as well so there are again some positives to both and negatives or a lot of positives to both sorry positives to the abundance mindset specifically

08:02 there are still some positives to scarcity mindset too it doesnt necessarily mean its completely all negative so thats something to be aware of if youre one or the other it doesnt mean everythings bad if youre so negative if youre a scarcity mindset but youre gonna struggle thinking through some some

08:18 things when it comes to money so you need to you need to understand where do you fit when it comes to abundance or scarcity so scarcity being like you money is lacking it you you believe hindered growth you're gonna have you don't think you deserve things you're gonna have a hard time getting things 

08:36 and you just don't think there's that much money like there's just not that much money out there there's never enough money you don't have enough money it's too hard to make money there's not that much possibilities of making money you're just scarcity right like you just dont think theres that much 

08:50 options for making money or you dont feel like you have enough money where abundance mindset is you believe theres a lot of opportunities theres a lot of resources theres a lot of money thats circulating and you can get that money because theres a lot of opportunities to get that money so you have this

09:02 abundance mindset when it comes to money and this is something that you can have like if you own a business as well and youre trying to get clients right theres theres not a lot of clients and theres too much competition or theres a lot of people to go around and we can all have our share because we 

09:16 all attract something different so this carries over to different parts of our life but you need to understand how you view it when it comes to money in your mind and knowing this about yourself and knowing where you fall in these categories will help you understand how its impacting your decision making

09:34 when it comes to money. Money or when it comes to job opportunities, when it comes to making money uhm a negative mindset around money is going to lead to unhealthy habits and cycles of debts and debt and just affecting your overall well being, anxiety, stress around money right because you have this

09:52 negative mindset all the time it's it's never good it's always bad and sometimes that's even like because you think money is bad because you think you shouldn't have that much money that money is the root of all evil that money is bad.

10:08 Which is not necessarily true money is not good money is not bad money is neutral you can do bad things with money and money and the love of money will absolutely affect your life but money is actually a neutral tool so i just want to make that point too because i do think there's people that are stuck

10:26 in a cycle of money that they feel like it's negative about money because they've kind of grown up in this way of thinking that money is actually bad and too much money is bad and that's not true that is not true money is neutral you can do good things with money and you can do great things with a lot

10:47 of money and you can do bad things with a lot of money but money in and of itself is not bad so see how that negative mindset could have really affected you if that's what you believe and that's what you thought you'd actually be self-limiting because you don't even want to get to a point where you have

11:02 a lot of money because you think it's bad and it's going to corrupt you and it's going to corrupt your kids and it's going to corrupt everyone around you so do you have a negative mindset about money or do you have a positive mindset about money?

11:12 Does your do you have a positive mindset that thinks you can learn from your mistakes that you can change how you view money that you see potential growth opportunities and youre aware of the opportunities that come with money and being financially sound so do you have that positive outlook about money

11:33 so we've gone through a few so far go through those questions are you scarcity are you abundance mindset are you positive are you negative when it comes to money again again if you overly trend all positive youre gonna also have some issues you have to work through too so it doesnt mean youre the better

11:50 person in this if youre listening to this youre better off youre gonna be better off in certain areas but youre gonna have some things you also have to work through just like if youre scarcity and negative there are things that you are actually probably really good at and im gonna assume its gonna be

12:04 saving that youre a good saver but youre gonna have to work through some things to get you know come back towards that middle a little bit so heres a few more good questions to ask about money ok so were working through where you land and some are youre gonna be on the spectrum somewhere one or the other

12:20 you might not be you know all the way this way or all the way that way so heres some questions to ask yourself what influences your belief about money the most?

12:32 Is it your upbringing is it your friends you currently hang out with is it your belief structure is it you know what what influences your belief about money the most im sure youve heard and i dont im not going to be able to quote the exact statistics on this but the people we hang around are very important

12:57 in this aspect really life in general but also when it comes to how you view money and again i don't know the exact numbers but i remember seeing that there's like these crazy things about if you hang out with high performers you perform you know maybe 15% better than you would have and if you hang out

13:15 with low performers you perform like 30% lower than you would have and again don't quote me on those exact percentages but basically showing the power the study showing the power of who you surround yourself with and how it impacts your life so is that impacting your money beliefs too?

13:32 How do you feel about spending money? Do you like it? Anxiety over spending money are you super relaxed about spending money is every time you have to make a purchase you're like like this grips your heart a little bit or or not or you don't feel that do you feel like money boosts your self-esteem or

13:54 causes feelings of insecurity uhm you know does it make you excited or do they make you anxious uhm do you have a history of making good financial decisions or if not why do you think uhm do you make a lot of mistakes financially when it comes to addressing money do you hesitate to address money you 

14:17 don't really want to think about it you don't want to talk about it you don't want to deal uhm or you know you you're happy to talk about it you know like let's say.

14:24 You uhm loaned someone money okay would you would you keep the friendship over demanding like a repayment or if you are you someone who's like I dont care they dont pay me they're not my friend ever again so you know how do you how would that situation affect you uhm are you someone whos prone to impulse

14:46 buying instant you know retail therapy emotional spending uhm and like do you buy something cause its just on sale but you didnt need it at all if you came across that how would you react okay so some questions i want you to think through and answer when it comes to you know what do you think about money

15:05 okay hopefully kinda trying to think through some of these things youre starting to see the trends of where you fall and what you believe about money so these are like going to how you view this how you view money in these capacities are going to really shape a lot of your money decisions and it's going

15:33 to in one way or the other cause some barriers when it comes to saving money okay so we're like over savers we're over spenders we're under saving were somewhere right in those realms and theres psychological traits that are really going to possibly hold you back that are going to come from your money

15:57 mindset so they they stem from your money mindset your money mindset is setting the foundation basically for these traits that you might have one or all or a few of these things that you struggle with okay so as I talk through these I want you to kind of like star the ones your like yeah thats thats 

16:14 hard for me okay. First one instant gratification are you someone that struggles with instant gratification like I decided I want that and I'm going to buy it now like I like that top and I'm immediately ordering it or you know whatever it might be right are you someone that's like its instant gratification

16:33 or nothing you go into the month not even knowing what youre going to spend your money on because it really depends on what you come across okay uhm that is one next one FOMO do you struggle with FOMO uhm you did set goals for saving uhm you do know what you want to do but and youre not necessarily instant

16:56 gratification but like all your friends are going out and or all your friends are going on a trip and you really want to join it is not in your budget and you cant afford it but you youre not going to miss out on it because everyone is going.

17:06 FOMO. Does that one affect you? Uhm the next one I would say I dont know it affects most people is lifestyle inflation and this is mixed between two different things so uhm lifestyle inflation is where you you as you make more money you spend more money and so you never really actually get to be in a

17:24 better place youre still paycheck to paycheck even though you make a ton of money and that is actually really common there are very wealthy people who make a lot of money every year who are still paycheck to paycheck because they have not addressed lifestyle inflation and theres kind of two sides to 

17:38 this theres an element of lifestyle inflation thats going to be necessary right like if you have extreme money goals and youve experienced having to be extreme saver and youre on a very strict budget youre going to inflate your lifestyle because you need to inflate your lifestyle as you make more money

17:54 once you reach certain goals because that type of lifestyle wasnt like its not its not realistic long term right like so that is thats ok like you cant say an unrealistic budget you can scrap and save and get down there when youre in the serious like grind of it but when you come out of it you you know

18:13 specifically people who are getting out of debt right you go scrap save super tight budget to get yourself out of debt and once you come out of debt and you are a little bit better at spending your money youre gonna increase maybe how much you eat out or or or you you might add some things as long as

18:26 you dont go crazy and go back into debt you need to increase your lifestyle a little bit thats totally fine but the other one is you dont even know really what you spend and just as you make more money its like cool well cause I want this lifestyle so Im gonna keep adding this uhm and so that can really

18:40 affect a lot of people cause you make more money and you dont actually get anywhere you dont and you dont have anything to show for the fact that you make more money because your lifestyle is inflated so much mostly because you just care about how it looks to the outside so thats gonna be an issue uhm

18:56 and then procrastination last one to talk about would just be procrastination are you someone that just is like i dont i dont know ill do it later im not ready to start yet i dont wanna start yet you just put it off you dont wanna deal with it too much to think about uhm so you just procrastinate to 

19:08 a later time uhm which one of those or which ones of those do you feel like you struggle with more than the others uhm and then its like figuring out okay how do you break free from those how do you what are ways that like okay you know you struggle with these things but how do you get out of that okay

19:29 if I know I'm scarcity mindset who loves to save and spending makes me nervous uhm so how do I how do I adjust my mindset to like you know change how I view money right its gonna be a few things you're gonna have to do it's not an overnight change but it's just knowing that about yourself so you can 

19:53 you can frame the decision through that lens of am I just being you know here's a decision I'm trying to make about a job am I just thinking I cant do this because Im just limited beliefs about myself or like or am I being realistic because this is not what Im cut out to do I dont wanna do it right so

20:09 its just being able to run those decisions through that lens of understanding where youre starting from uhm so I would say theres a few tips for just like especially those last few things we just talked about that stem from your money mindset how do you kinda break through some of those so uhm one youre

20:28 gonna say gratification if thats you you need to figure out how to like tie your hands up sit on your hands basically like the kid in school cause who keeps hitting uhm and delay your gratification like k you want something and you know you want something but you've set a rule for yourself that you were

20:49 going to wait two weeks man that sounds like a really long time for some of you. I'm gonna wait two weeks to not buy that and I'm talking like not a car okay I'm talking like something smaller uhm I don't know piece of clothing you want or something, pair of shoes.

21:03 I'm gonna wait a couple weeks and Im gonna sit on it and make sure I really want them and maybe youre gonna wait longer youre actually gonna save for it first youre going to practice saying no to yourself even with small things and build in the discipline of delaying the gratification that is a discipline

21:23 and disciplines take like practicing the muscle youre not just gonna be good at it its not just gonna like flip overnight you are going to have to practice it and build that in build in that discipline ok so if you you are someone that struggles with instant gratification I want you to focus on that 

21:40 and you are going to set rules around I don't get to buy it because I just saw it and now I want it I'm gonna walk out of the store like I'm walking out of the store I am not buying this and if tomorrow I like this is a clothing thing right like tomorrow Im like no I did actually really want that then

21:56 you can go back in the next couple of days and get it but dont buy it on impulse wait with everything and practice you dont have to stay that way forever youll start to learn what you can buy on impulse and what you can wait for right youll be able to start to decipher but I think when you struggle with

22:14 that youre gonna have to go a little hardcore and go all in on delaying it to practice that muscle ok the next thing I want you to do is I want you to start smart savings goals so you need to have good goals that you are going to try to reach and these goals need to be like achievable and and break them

22:41 up into smaller goals like don't set so that's where they're attainable realistic you know part of that acronym but even maybe shift it down a little bit smaller like I want you to start a little bit smaller in reaching those goals okay and set really clear goals for yourself youre and then youre gonna

23:03 need to create a budget thats just the reality okay I know Im sorry and no one wants to hear like you everyone wants a way around that youre not gonna get a way around that you need to know your cash flow you absolutely need to know your cash flow of whats coming in and whats going out cause if you dont

23:17 know your cash flow youll never hit your goals you wont cause you dont even know what youre working with and you dont even know where its going so you have to work on your cash flow absolutely okay and then another small change you can make is just automate your savings and pay yourself first so if you

23:40 know now what your mindset is and you know the things you struggle with pick a couple things things small things that you can work on to help push through some of those mindset issues you have that make you just a little bit uncomfortable and just grow you a little bit and then do it again and if few

24:00 months push yourself a little bit more for a little bit more uncomfortable and do it again and do it again and do it again until you shift some of those mindset things that are holding you back from getting to where you want to be.

24:13 I hope that's helpful I know there's a lot of its a lot of like feelings a lot of thinking about yourself which can some people dont comfortable doing its new umm but if it is helpful I would love to hear how you were able to kind of like understand yourself more and make better goals now that you know

24:36 yourself better so umm I would love to hear how you implemented some of this into your daily life and challenge yourself in certain ways and always remember that if its something like a lot of this is that's helpful to have accountability with and someone to talk things through and that is all part of

24:52 umm how I work with my clients like it is important to understand this part of yourself and again your spouse if you're working with someone else with your money umm because it is going to helping break down some of these barriers is going to empower you and take you to new levels that you just didnt

25:09 think youd get to because you were stuck in that mindset so umm again hope it was helpful and I look forward to hearing how you were able to implement it.

25:20 And I hope you all have a good day and we'll see you at the next confident dollar podcast episode