Is Your Money Mindset Holding You Back?
As part of our Women’s History Month series, Cinneah (the founder of Flynanced) and I co-hosted a series of incredible roundtable discussions with some of our favorite women in the personal finance space with the goal of fostering rich intersectional conversations around money.
We asked Ayana, a debt-free money coach, about how we could incorporate money mindset into our budgeting and why it matters. Here’s what she had to share. (You can watch the full recording of the roundtable discussion, Building a Budget that Loves Your Back, here.)
What is a Money Mindset?
When it comes to mindset and budgeting, the first thing to get clear on is exactly what money mindset is. I define money mindset as your thoughts and opinions about money. Basically how you think and feel about your money.
These thoughts typically play a major role in the way we relate to our money, manage our money, feel about spending and earning money, and how we feel about keeping money and building wealth.
Does thinking about your money give you anxiety? Or are you afraid to check your bank account because you don't know what you're going to see, so it's something that you avoid?
These are all perfect examples of the kinds of money mindset struggles that many of us have. Your mindset is so underlying, it's so under the radar that many times we don't even realize how our mindset impacts the way that we relate to our money.
Maybe you grew up in a household where you were taught that money is the root of all evil. When you hear that all your life, you go through life thinking that. So in your adult life, you don't pursue raises and you don't pursue wealth because you think that if you gain wealth, it's going to mean you’re evil or your values will change in some way.
Our money mindset is shaped by our observed experiences and our actual experiences. It's really important to get clarity on where you're starting with your mindset, because that’s the first step towards getting on the right track.
You can have the perfect budget and you can have the perfect strategies, but if your mindset isn’t right, you're not quite going to receive the full benefit of your personal finance journey.
Evaluate Your Money Mindset
The next step is evaluating your money mindset. How do you determine what sort of money mindset you have? Here are some important questions you can ask yourself to self-evaluate.
What are my current beliefs about money?
How do I feel about earning more money, spending my money, or building wealth?
What sort of reactions do I have to people that have already built wealth?
What sort of reactions or emotions do I associate with people that don't have money and people who do have money?
What words would I use to describe my current relationship with money? Is it healthy? Is it strained? Is it stressful or filled with anxiety?
Identifying these things are all great ways to assess your money mindset so you can start to improve it.
Money Mindset and Budgeting
A budget is a plan to spend your money during a given period of time. My hope is that you remember that your budget isn't anything restrictive. It's not a prison sentence. Once you figure out a budget that works for you, it's a tool for empowering you to spend your money.
A budget puts you in the driver’s seat when it comes to your money. It is a way of giving yourself authority over your money, as opposed to letting your money run your life.
Putting it into Action
Our budget can be a great tool to help us improve our money mindset. If you're someone who has a lot of debt, your mindset might be “I'm going to die with this debt. I'm never going to kick it. I'm never going to be debt free.” As you begin to shift your mindset into a “I will be debt free. I can be debt free” mindset, this can then be reflected in your budget where you're then allocating more money towards your debt payments. You’re shifting your priorities when it comes to how much you're spending on dining out, to maybe put more money towards your debt.
Maybe you have strong feelings about building wealth or feeling like you can't treat yourself to nice things. As you begin to see yourself as more worthy of building wealth or having nice things, you can use your budget as a tool to increase this in your life, too. With a mindset shift, you can start to treat yourself to fun and not feel guilty about it. You can go to the store and buy that thing that you've been wanting because you budgeted well for it.
Next Steps
Your money mindset is really important when it comes to your personal finances.
Evaluate your money mindset using the questions above
Create a budget that works well for you
Use your budget as a tool to improve your money mindset
Learn more about working with Ayana and check out her resources.
Watch the full recording of the roundtable discussion, Building a Budget that Loves Your Back, here.
About Ayana:
Ayana Campbell Smith is a debt-free money coach with a passion for helping millennial women and couples get unstuck and become financially empowered so they can ditch debt, save more, and win with money! In August 2019, she launched Millennial Money Guide. Through her email newsletter, Instagram, blog, and money coaching programs, Ayana shares practical tips and money advice to help young adults navigate the sometimes intimidating and often misunderstood world of personal finance.
Follow her on Instagram at @millennialmoney.guide