Take a moment to ponder on changing your money story and creating abundance. What does money mean to you? What’s your money story?
For many, it’s the matter of numbers and income, expenses, savings, and investments.
But today we’re here to discover that money is much more than that.
Your relationship with money is not set in stone. It’s a dynamic aspect of your life that you have the power to shape, improve, and use as a tool to design the life you desire.
By understanding your money mindset, cultivating positive financial habits, and aligning your actions with your financial goals, you can truly take control of your financial destiny.
In this episode you’ll learn:
- The Power of Your Money Mindset and your relationship with wealth
- The common money story, beliefs and attitudes that shape our financial journeys
- Why financial self awareness is key to to building a healthy relationship with money
- How to identify which stage of life you’re in and your financial priorities
- The four financial triggers that impact your financial decisions
- Three key strategies that can improve your financial habits
Shownotes for this Money Episode
Before we delve into the depths of the psychology of money, I want you to take a moment to think about changing your money story, and to ponder this:
What does money mean to you?
For many, it’s a matter of numbers—an income, expenses, savings, and investments. But today, we’re here to discover that money is much more than that.
The Power of Your Money Mindset
Your relationship with wealth is profoundly influenced by your money mindset. This mindset encompasses your beliefs, attitudes, and emotions related to money. It’s the lens through which you view financial matters, make life-altering decisions, and help you in changing your money story.
Understanding Money Beliefs and Attitudes
Let’s start by exploring the common money-related beliefs and attitudes that shape our financial journeys. You may relate to:
- Scarcity Mindset: The belief that there’s never enough money to go around, leading to fear and anxiety about finances. This mindset can stem from past financial struggles or societal influences that emphasize lack.
- Abundance Mindset: The conviction that opportunities for wealth are boundless and attainable, fostering optimism and financial courage. People with this mindset tend to view setbacks as temporary and see potential for growth in every situation.
- Money as a Measure of Success: The idea that one’s self-worth is intrinsically tied to financial success, often leading to relentless pursuit of wealth. This belief can create a constant need for external validation and hinder the ability to find contentment outside of financial achievement.
The Importance of Financial Self-Awareness
Moving forward, let’s delve deeper into a crucial aspect of your relationship with money—financial self-awareness.
This concept is the cornerstone of building a healthy and empowering connection with your finances.
It’s about understanding your financial values, priorities, and triggers, and it plays a pivotal role in shaping your overall money story, mindset and habits.
Understanding Your Financial Values
Your financial values are the guiding principles that inform your decisions about money.
They reflect what you believe is truly important in life and where you want to allocate your resources.
To gain clarity on your financial values, consider these questions:
- What brings you the most joy and fulfillment in life?
- Your answer may range from spending quality time with loved ones to pursuing personal passions and experiences.
- What are your long-term goals and aspirations?
- Your financial values are closely tied to your dreams, whether it’s buying a home, traveling the world, or supporting a cause you’re passionate about.
- What do you want your financial legacy to be?
- Think about the impact you want to leave on future generations or the causes you want to support.
By identifying and aligning with your core financial values, you can make more intentional financial choices that reflect your true priorities and change your money story.
Clarifying Your Financial Priorities
Financial self-awareness also involves understanding your financial priorities at different stages of life.
These priorities can evolve over time, and being aware of these shifts is crucial for making informed financial decisions.
Here are some common financial priorities you may encounter:
- Early Career: In the early stages of your career, you might prioritize building a financial foundation, paying off student loans, and saving for future goals.
- Family Life: As your family grows, your priorities may shift toward saving for education, homeownership, and ensuring the financial security of your loved ones.
- Midlife: During midlife, you may focus on maximizing retirement savings, paying down mortgages, and planning for a comfortable retirement.
- Retirement: In retirement, your priorities might revolve around preserving your wealth, enjoying your post-career years, and possibly leaving a legacy for future generations.
Being aware of your current financial priorities allows you to allocate your resources effectively and adapt your financial plan as circumstances change.
Recognizing Your Financial Triggers
Financial triggers are emotional reactions or situations that impact your financial decisions.
These triggers can lead to impulsive spending, anxiety about money, or even avoidance of financial matters altogether.
Examples of common financial triggers include:
- Fear of Missing Out (FOMO): The pressure to keep up with others’ spending habits or lifestyle choices can lead to overspending and financial stress.
- Emotional Spending: Using shopping or indulgent spending as a way to cope with stress, sadness, or other emotions.
- Comparison Syndrome: Constantly comparing your financial situation to others and feeling inadequate as a result.
- Avoidance of Financial Conversations: Refusing to discuss finances with loved ones due to discomfort or fear of conflict.
By identifying your financial triggers, you can develop strategies to manage them more effectively.
This might involve seeking support from a financial advisor or therapist, practicing mindfulness to reduce impulsive spending, or having open and honest financial conversations with your loved ones.
In essence, financial self-awareness is the cornerstone of building a healthy money mindset and making sound financial decisions.
By understanding your financial values, clarifying your financial priorities, and recognizing your financial triggers, you can take control of your financial destiny and make your way into changing your money story.
You can change your money story to a new more empowered relationship with money.
A couple of resources you may enjoy are Her First $100K podcast by Tori Dunlap podcast and her new book Financial Feminist
Plus the book Money: A Love Story by Kate Northrup.
Strategies for Enhancing Your Financial Habits
No matter where you fall on the spectrum of money mindsets, there are strategies that can improve your financial habits:
- Creating a Budget: A budget can be a powerful tool to help you track expenses, set financial goals, and regain control over your finances. It’s not about restriction but about conscious allocation of resources.
- Practicing Gratitude: Cultivating gratitude for what you have can shift your mindset from scarcity to abundance, leading to a more content financial life. Take time to appreciate the things money can’t buy—relationships, health, and personal growth.
- Setting Financial Goals: Clearly defined financial goals provide direction and motivation for managing your money effectively. They can range from short-term goals like paying off debt to long-term goals like saving for retirement or a dream vacation.
The Path to Financial Freedom
Many of us dream of financial freedom, and your money mindset and habits play a crucial role in achieving this goal.
One approach that has garnered significant attention in recent years is the “Barefoot Investor” method.
The Barefoot Investor Method
The Barefoot Investor, as popularized by Scott Pape, is a practical and straightforward system for managing your finances and working toward financial freedom. I recorded a whole podcast on how to use this to achieve financial freedom.
In short, it involves:
- Simplifying Your Finances: By reducing complexity in your financial life, you can make it more manageable and less overwhelming. This can include consolidating accounts, automating bill payments, and decluttering your financial paperwork.
- Automating Savings and Investments: Creating automated systems for saving and investing ensures that you consistently pay yourself first, regardless of your financial situation. It removes the temptation to spend money impulsively.
- Eliminating Debt: Prioritizing debt reduction can free up more of your income for saving and investing, ultimately accelerating your journey toward financial freedom. The “Barefoot Investor” method provides specific strategies for tackling debt efficiently.
- Building Financial Independence: Gradually building your wealth over time allows you to achieve financial freedom and security, providing peace of mind for the future. This involves strategic investing, diversifying your assets, and having a clear plan for retirement.
Taking Control of Your Financial Destiny
Your relationship with wealth is not set in stone. It’s a dynamic aspect of your life that you have the power to shape, improve, and use as a tool to design the life you desire.
By understanding your money mindset, cultivating positive financial habits, and aligning your actions with your financial goals, you can truly take control of your financial destiny.
As we wrap up exploring this fascinating exploration of the psychology of money, remember that your relationship with wealth is a living, breathing entity.
It evolves over time, influenced by your experiences and decisions.
By nurturing a positive money mindset, practicing financial self-awareness, and employing effective financial strategies, you can transform your financial journey and achieve greater financial freedom and well-being.
So, I hope that what you want to work towards is a relationship with wealth that is positive and that is abundant. And that building wealth is something that you will work on.
It evolves over time and it’s influenced by your experiences and decisions and that you get to change every single day.
You don’t need to hold on to your old money story or beliefs. You don’t need to berate yourself for past decisions.
Fresh slate every day. It starts with you.
Build the wealth that you want.
If you nurture a positive money mindset, are eager changing your money story, and you practice that financial self-awareness.
Even if it’s just writing down what you spend in a month and what you bring in and you look at effective financial strategies, maybe you hire some help, you can transform your financial journey to whatever you want it to be and achieve greater financial freedom and well-being.
If you want to work on this together as just one part of your life pilot journey, please consider jumping on a evolve discovery call with me because I want you to evolve into the person that you want to be and to have the life that you truly deserve. You can do that at lifepilot.co/coaching
It’s a 30-minute complimentary chat with me to see if we’re a good fit for working together. I would love to be your coach. I would love to be your cheerleader. I would love to help you. achieve more financial abundance in your life and across all areas of your life.
So until next time, stay financially empowered, stay mindful of your money story, and always be the pilot of your own financial destiny.
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