I used to have a very poor mindset. Lots of excuses were made and I would actually dig for reasons I wasn’t succeeding with my personal finances. Yes, that’s right, I would actually expend energy trying to find excuses for my lack of success. It wasn’t until I shifted to a positive money mindset and changed my language around personal finances that I began to see real results.
My story is the inspiration behind this post, as well as most other posts I’ve written. It’s also the reason behind my book Cash Uncomplicated. I want others to understand the importance of language around creating a positive money mindset.
What is a Positive Money Mindset?
My old way of thinking was success first, change in attitude later. What I’ve learned is I actually had it backwards. The truth is the mindset comes before the success.
So if we translate that to personal finance, it means a positive money mindset comes before financial success. Once people begin to believe they can succeed with their personal finances, the path becomes much clearer. There’s still a lot of work to do, but the foundation is set.
Can Mindset Be Shifted?
The short answer is yes! The longer answer is yes–but it doesn’t come overnight. It takes education, action, and a willingness to change. There’s not a set amount of time because it’s going to vary for everyone. But as we get around the right people, read the right books, and keep a growth mindset, the magic begins to happen–and the mindset begins to shift.
Benefits of a Positive Money Mindset
There are myriad benefits to having a positive money mindset–too many to name in a short blog post. However, there is one in particular that stands out. It’s that a positive money mindset is a foundational piece to success in personal finance. Without it, we are rudder-less and have little direction.
It’s like if someone told you they want to play baseball but are no good at it, and never will be good. This person has already lost because they believe they have no chance. Someone who has no belief has little to work for. The belief and positive language isn’t there.
However, if that same person shifted their mindset to believing they can become a baseball player–they have a chance. It doesn’t mean they are automatically going to the major leagues, but they have a much greater chance of success than the person who says they have no chance. The player with the belief is going to work harder, put in the hours, keep a growth mindset, and keep learning new skills.
Same with personal finance. The individual with a positive money mindset is going to believe they can be successful, put in the work, learn the skills, make mistakes and learn, etc. They’ve got a real shot, even if they aren’t in a great financial position to start.
Relationship Between a Positive Money Mindset, Language, and Actions
What we tell ourselves matters. If we tell ourselves that we are not good at something, we are going to find reasons that we’re not good. However, if we tell ourselves that we can learn and improve, we create a real opportunity to do just that. To quote Henry Ford, “Whether you think you can or think you can’t, you’re right.”
Our language, or what we tell ourselves, determines our actions. To provide a simple example, if an individual believes they can invest $1,000 every month within the next three years, they are going to start implementing strategies to reach that goal. Start with a couple hundred, move up to over $500, and eventually reach the target of $1,000. However, if someone believes they never will be able to invest $1,000 per month, they are not going to take the necessary action steps to reach that goal.
Changing Your Language to Create a Positive Money Mindset
Since language is such an effective way to create a positive money mindset, it’s time to create specific examples. Oftentimes, a simple re-framing of a statement can create an entirely new mindset that will greatly increase the chances of success. The remainder of this post will focus on such examples. Starting with the old language, transitioning to the re-framing, and then seeing the positive results.
Number 1: I’m Not Good with Money
I made this number one on the list because it’s something I used to say myself. This statement gave me a built in excuse to be unsuccessful with money. Making this statement gave me an excuse to turn off my brain for anything money related.
- Credit card not paid off: I’m no good with money
- Lack of savings: I’m no good with money
- No investments: I’m no good with money
You get the point–the more I made this statement the more I excused bad financial behavior. Instead of changing the behavior, I made excuses and allowed it to go on.
Once I shifted my language from “I’m no good with money”, things began to change for the better. Here are a few re-frames for “I’m no good with money”:
- I’m learning about personal finance, I can improve my situation.
- There are so many opportunities to improve–like reading books, listening to podcasts, finding a mentor, etc.
- We all have to start somewhere.
- There’s no doubt that I’ll get better.
Number 2: I Don’t Have a Financial Education
Number two on the list is also something I used to frequently say to myself. “I don’t have a financial education.” I’d make this excuse and that would be the end of it. No accountability, no follow through, no attempts to educate myself on the topic.
I didn’t have a formal financial education so I conveniently found a way to build that into my list of excuses as to why I wasn’t doing well with my personal finances. Seemed easy at the time, but the long-term consequences of being financially illiterate started to add up. Long story short, I transitioned this language to more positive and growth mindset centered language.
- There are endless books and blogs about money I can read.
- I can listen to as many personal finance podcasts every week as I want.
- There are plenty of online forums where I can read about money.
- Every time I learn something new about money, I’m getting smarter with my finances and future.
Number 3: Inflation is Too High
Here’s a very relevant one: inflation is too high. At the time of this writing, inflation is at 8.5 percent. That’s very high. And prices for things like gas and plane flights are even higher. It would be easy to throw up your hands and say prices are too high.
However, if we maintain a positive money mindset, the chances of success through inflationary periods are much higher. Now, I’m not having delusions of grandeur where I believe having a positive money mindset will make inflation magically go away. Of course that’s not possible.
What I am saying though is we can change our mindset to better handle inflationary periods like the one we are currently in. Behind every challenge is an opportunity. Here are some examples of reframing language/thoughts we can utilize:
- Finding business opportunities that do especially well during inflationary periods
- Identifying specific areas hit hardest by inflation and deciding whether you need or really want those services
- Holding off on buying a large purchase during high inflationary periods
- “This will pass, nothing lasts forever”
Related:
Number 4: I’ve Got Too Much Student Loan Debt
In the early 2000’s I attended law school and failed out after a little over a semester. I expected to graduate and become an attorney so when I got my grades back after the first semester my plans were suddenly derailed. Not only was I not going to finish law school but I also had student loans to go along with it.
Law school loans are not cheap either. I had almost $20,000 in student loan debt just from one semester alone. So it was kind of a double whammy for me–plans derailed and student loans to go on top of it. And just days after being a full time law student, I needed to find a job to make ends meet. Not my finest moment at the time.
Needless to say I needed to adjust my attitude quickly or I was going to drown in student loan debt and my other bills. I tell this story because I know I’m not the only one who had challenges with student loan debt. There are others who left college or a graduate program early, while many others spent six figures on a degree with little value in the workplace. So I’m not alone.
What kind of language can someone in this position use to improve their money mindset?
- “I’m on track to pay this off in BLANK years.”
- “My education has opened new doors and opportunities for me.”
- “Loans are the price I was willing to pay for these opportunities.”
- “It takes time to pay off student loans, I’m on a good pace.”
Related: Zero Regrets: My Failed Attempt at Law School
Number 5: I Was Never Taught About Money
If you really think about it, there are a lot of things we were never taught. Most of us probably weren’t taught about proper fitness and nutrition, how to buy a car, or even how to do your current job. But we don’t let that hold us back. We learn, practice, and get better in these areas. Personal finance is no different.
It’s well known that financial education is lacking in most countries. Kids are taught about everything from geography to calculus in school but come out of high school and college completely financially illiterate. It’s not inconceivable that the valedictorian of a high school who took a full load of honors courses has no idea how to create a monthly budget.
Here’s my point though–just because we weren’t taught something doesn’t mean we can’t learn it or develop those skills. It’s up to us to learn and practice new skills and be better today than we were yesterday. That’s where the reframe comes into play. Instead of dwelling on not having any financial education, we need to change our language to be more growth mindset centered.
Instead of saying we weren’t taught, start using language like:
- “I’m learning to budget.”
- “Getting in the habit of paying myself first has been challenging but I’m starting to see results.”
- “I still make mistakes, but I’m learning from each one and getting better.”
See how language matters? With simple adjustments to our thinking and language, we are able to reframe from victim mode to action mode. And action mode is when progress is made.
Number 6: My Family Isn’t Good with Money
Ok, so you’re family members aren’t good with money. That doesn’t mean you can’t learn new skills and be good with money. It might be true that your family isn’t good with money but that really has nothing to do with your potential or abilities.
In her book Mindset: The New Psychology of Success, author Carol Dweck writes about a growth mindset versus a fixed mindset. A fixed mindset would say their family is not good with money and be resigned to the same fate. However, a person with a growth mindset would acknowledge their family isn’t good with money, but then go out and learn about the topic.
Same thing for someone who has challenges with math or reading. The growth mindset individual would acknowledge the challenges but then go out and learn the topic. The person with a fixed mindset would resign themselves to not being good in the subject, not allowing for future growth.
Some language we can use to reframe the statement about your family not being good with money:
- “I’m going to be the first person in my family to break the cycle of financial illiteracy.”
- “Just like anything else in life, money is something I can learn about.”
- “I can improve my financial literacy.”
- “I’m excited to teach my kids about personal finance because I didn’t get much financial education as a kid.”
Number 7: Investing is Only for the Rich
This exact statement is something I used to think. Not only think, but wholeheartedly believe. And I don’t think I was the only one with this mindset. Investing is often portrayed as something that is out of reach and intimidating. So complicated that you have to hire a professional for a lot of money to even begin investing.
As I became more educated, I learned this wasn’t true. It was a figment of my imagination and faulty thinking. Changing the language I used around investing helped me get out of this mindset and into a more positive money mindset.
Instead of believing investing was only for the rich, I began telling myself things like:
- “Investing is not so complicated after all.”
- “Paying myself first allows me to invest consistently.”
- “Once things are set up, it’s not so difficult.”
- “I see how the average person can begin building wealth by investing.”
Number 8: I Can’t Get Ahead Financially
For years and years, I was behind financially. True, I was lacking in the tactical areas around money, but the biggest thing holding me back was the negative mindset I had put myself into. In short, I was telling myself things that weren’t true about money because those were my beliefs.
Furthermore, I made no effort to challenge or change those beliefs. Which left me unnecessarily stuck financially for a long time. Fortunately, I made the transition from thinking I can’t get ahead financially to believing that I could. It took a lot of education and practice, but it did happen over time. A lot of it was also the language I began using around money. “I can’t get ahead” was replaced with:
- “I’m seeing progress.”
- “The new plan is working.”
- “Getting ahead with money isn’t as hard as I once thought.”
Number 9: Others Aren’t Helping Me
I don’t know if it was immaturity or a bit of delusion, but I used to have the mindset that others would help me advance my personal finances. I don’t know why I had this mindset, but I did–and it most definitely didn’t help.
Once I shifted the mindset that I needed to help myself by actively seeking out mentors and guidance, things began to change for the better and I actually was able to get help from others. Not the kind of help I originally expected, but much better. Actively seeking out help and mentors by providing value is a much more powerful kind of help than something random or just getting lucky.
Taking control by actively seeking help and mentors helped create a much more positive money mindset. Some might call it the language of action, others might call it taking control. Whatever you want to call it, this type of thinking is sure to help anyone advance.
Number 10: Taxes Are Too High
“I don’t want to make more because then I’ll get taxed higher.” This is a statement I’ve actually said before. Furthermore, I also would get irritated when I heard about others getting tax breaks. This mindset was a result of a lack of education and an unwillingness to learn.
Once I became more willing to learn how to make more and gain tax benefits at the same time, I also started to shift my language. Instead of using negative and defeating language, I transitioned to more constructive language that helped shape a positive money mindset.
Instead of getting irritated at those who were getting tax breaks, I began to learn how they did it and began implementing some of those strategies. This simple transition from irritation to curiosity really helped shape a much stronger financial outlook.
Final Thoughts
It’s not necessarily hard to create a positive money mindset, but it does take a few things. First of all, for those with a negative money mindset, it takes awareness of the issue. Secondly, it takes some education to learn and acquire new skills. Lastly, transitioning to a more positive money mindset requires a change in language and thoughts.
So a positive money mindset is achievable for anyone. But it doesn’t come free and it doesn’t come easy. It’s not that hard, but it’s also not easy. Like anything else in life worth having, creating a positive money mindset takes effort and work.
How has your language impacted your money mindset?
