Your money attitude will determine your success with personal finances. It all starts and ends with attitude. With the right money attitude, financial magic can happen. With the wrong attitude, years of unnecessary hardship and negative thoughts.
What is Money Attitude and Why Does It Matter?
Money attitude is the way we think, feel, and act around money. The perceptions we have around money, those with money, ourselves, giving to others, and many other things. It’s the foundation of our money mindset.
A solid foundation goes a long way and can carry someone through the good and bad times.
What Money Attitude is Not
While it’s important to address what money attitude is–it’s also important to address what it’s not. Money attitude is not intended to be:
- Greed
- Hoarding
- Over-consumption
- Comparing yourself to others
- Entitlement
How to Improve Your Money Attitude
There are lots of ways to improve your money attitude. Improvement doesn’t happen overnight, it’s a daily and continuous process. Consistency creates big results that compound with time and effort. These are some of the ways to begin the compounding and improve your money attitude.
Number 1: Define Your Values
The first step to improving your money attitude is to define your values. What do you want and what do you need? What kind of things do you value? This is value-based spending, the act of spending your money only on necessities and things that truly matter.
For someone who highly values time with family, they would try to design a life and career where time if valued over money. That might mean less hours at work, a less challenging career, a part-time position, or even taking a series of mini-retirements. Someone with these values likely would spend the majority of their money on family related things and experiences.
Another example is someone in their early 20’s who values working hard to boost their financial situation, have more money for socializing, and take the occasional trip. Their values are totally different from the first example so their behavior and actions would also be very different.
It’s also important to remember that values change over the years. The core values like honesty, integrity, and treating people well never go away but some of the other values do change. Periodically assess your values to make sure things are still on track and be willing to embrace the changes.
Number 2: Gratitude and Appreciation
A great way for anyone to improve their money attitude is gratitude and appreciation. In a world of consumerism and always wanting more, it’s important to pause and be grateful for what we do have. And there is a lot that we do have.
If you’re reading this blog, it means that you have a phone, tablet, or computer–or maybe all three. That’s something not everybody has, and nobody had 100 years ago. I think that’s reason to be grateful.
Or take access to transportation as something to be grateful for. The availability of a subway, train, trolley, car, bus, airplane, or any other form of transportation is something very recent in our history. People used to walk places or ride an animal to get where they needed to go. Which cut off a large part of the world.
So think about things you are grateful for:
- What do you have now that you worked hard to get?
- What improvements have you made over the last year?
- Do you have shelter, food, and transportation?
- Have you been able to create more time to spend with family and friends?
These are all things to be grateful and appreciative for.
Number 3: Think Positively
Number three on the list of how to improve your money attitude is to think positively. Things can, and do go wrong in life. That’s part of what makes it fun and unpredictable. Money is no different, and that’s why it’s important to think positively.
When things aren’t going as well as expected, thinking positively affords the chance to find the lessons and opportunities in defeat. For example, a 25-year old losing money in an individual stock. Maybe the lesson here is to buy index funds instead, do more research, or spread out the risk.
While painful, this lesson might save hundreds of thousands down the line. Sure, the loss hurts now, but it would hurt a lot more at the age of 55 or 60. As long as the same mistakes aren’t repeated, this person will become a more skilled investor.
Or using another example, a real estate deal that goes bad. The lessons might be to better vet the deal, business partners, and collaborate more with your CPA. While the loss will be painful just like the stock example, you will become a more skilled investor.
Even something as simple as overdrawing your checking account provides the valuable lesson to pay more attention to the monthly deposits and debits. This was an important lesson I learned in my early 30’s that also prompted me to change my financial behavior and eventually write my book Cash Uncomplicated.
Number 4: Abundance Mindset
When people think scarcity, they frequently get scared and tentative. It’s the “play not to lose” mentality that becomes a mindset. Conversely, the abundance mindset is “play to win.”
Even if you lose, the idea behind the abundance mindset is that there are more opportunities ahead. That doesn’t mean make foolish decisions, it just means that there are other opportunities.
For example, a businessperson who attempts to acquire a new client. They took the prospective client out to dinner, prepared a presentation, did the follow up, did all the right things, and still didn’t gain the deal. With the abundance mindset, the businessperson would take it as a learning experience–fine tuning the presentation, following up with their supervisor, researching the product further, etc.
Realizing there will be other opportunities. While the person with the scarcity mindset would dwell on the situation, think about the time and money they spent, and maybe even give up.
Number 5: Journal
Improving your money attitude takes some thought and reflection, and that’s where journaling comes in. Taking the time to journal slows things down and allows for reflection time. It’s a time to think about the wins and losses, the lessons, and steps to improve.
Journaling also has a way of putting things into perspective. What you thought was a big deal earlier in the day might not seem so big after reflecting on it. And you might even get some clarity by writing and reflecting–allowing yourself to come out stronger the next day.
Related: 34 Money Mindset Journal Prompts to Get You in Control of Your Personal Finances
Number 6: Learn
Next on the list of how to improve your money attitude is to learn. There’s a quote from Lou Holtz: “In this world you’re either growing or you’re dying so get in motion and grow.” Getting in motion and growing is another way of saying learning.
Learn something from:
- Every victory
- Every defeat
- Each and every day
- Everyone you meet
There are opportunities to learn and grow everywhere. Books, podcasts, business interactions, a mentor, a person you just met, your parents, etc. There are opportunities to learn everywhere, you just have to take them.
Number 7: Take Action
Naturally following the section on learning is taking action. Learning is no good if we don’t take action. Furthermore, taking action helps us to learn more because we are doing more.
The more action we take, the more we learn. Success is not going from point A to point Z. It’s taking action to get from point A to point B. Then point B to point C. And so on down the line.
Number 8: Avoid Negativity
Number eight on the list of how to improve your money attitude is to avoid negativity. Negativity comes in many forms, including but not limited to:
- Friends
- Media
- Family
- Acquaintances
- Yourself
As much as you might like or care about someone, be careful about the messages they are giving you. Are the messages positive or what you need to hear? Or are they just negative and adding zero value? If the messages are negative without any suggestions for improvement, either redirect the conversation or make the hard choice of spending less time with the person.
Likewise, pay attention to the media you are consuming. What are the messages? Is it good information or “junk food” for your brain. If the messages aren’t helpful and negative in nature, it’s time to find new media. Or at the very minimum, reduce the amount of consumption.
Number 9: Believe
A positive money attitude starts with belief. After college, my beliefs about money were highly skewed. Therefore, my money attitude was poor and to no surprise, my personal finances were a mess. It was all related.
What I’ve learned over the years is that it starts with belief. Belief that you can be good with money, generous, giving, financially free, etc. Your beliefs turn into attitude, which then turns into behavior. And behavior is what changes lives for either good or bad.
Number 10: Track Progress
Most people love competition. We’re constantly observing others around us and trying to gauge our progress compared to what others are doing. A few examples:
- Joe down the street just got a new car, I should get one too.
- Maryanne moved to a really nice neighborhood, what am I still doing in this starter house?
- Trevor always seems to be wearing a new suit, I need to up my wardrobe.
I think we’ve got it a little backwards. Rather than comparing ourselves to others, it’s important to track your own progress. Where are you today versus last month, last year, and five years ago? Are you making progress towards your goals and ambitions? Here are a few hypothetical examples of tracking your own progress:
- “Five years ago I had no money in the bank, but had a goal of $20,000 for emergencies. I have met that goal.”
- “Three years ago I began automating my money into an investment account. Started with $100 per month and have moved that up to $350 per month.”
- “Six years ago our family had two car payments. Both cars have been paid off and the money is being reallocated to investments.”
In all three of these hypotheticals, tremendous progress was made. Sure, compared to Warren Buffett this doesn’t seem like much, but when compared to where you were years ago, there have been massive improvements. That’s why it’s so important to track your own progress so you can recognize those wins and keep improving.
Number 11: Get Around the Right People
Who you spend time with matters. Jim Rohn said you are the average of the five people you spend the most time with. If the five people you spend the most time with have terrible attitudes and are constantly complaining, chances are you going to be the same way.
But if you spend time with people with a growth mindset who are always striving to get better, chances are you will be the same way. Spend time with value-based spenders, and you likely will become (or continue to be) a value-based spender.
Take great care in who you spend time with because that is the environment you are creating for yourself. And as Benjamin Hardy writes in Willpower Doesn’t Work, your environment highly influences your success. And the environment is something that you have control over and can adjust as needed.
Conclusion
Improving your money attitude is the first step to revamping your personal finances. It’s the precursor to behavioral change, and changes in behavior are what prompt real movement and progress. Attitude, behavior, and taking action are all interrelated and feed off each other.
Start by taking action on a few of these strategies to change your money attitude. Then move on to a couple more. You don’t have to do them all at once–daily and consistent action over time is key and where the real progress lies.
How else can you improve your money attitude?
