12 Ways to Transform Your Money Mindset

January 17, 2021 in Productivity, Self-Development

Do you want to make more money? I’m guessing yes, we would all love to make more money. Is your money mindset hindering your probability of achieving financial freedom or living a comfortable lifestyle? Here are 12 ways to transform your money mindset.

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12 Ways to Transform Your Money Mindset

12 Ways to Transform Your Money Mindset

Tidy up your finances

If I asked if you know exactly what your financial situation looks like right now, do you know the answer? Right down to when your debts would be paid off and when you will reach your savings goals? If the answer is no, you need to take a look into your current situation. Get yourself a spreadsheet and analyse what’s going on. Finding yourself continuously going overdrawn or living in your overdraft? Record your expenditure every month to see EXACTLY where your money is going. You will then need to create a budget for your spending going forward.

Instant gratification

How many times have you made a purchasing decision in the spur of the moment, only to regret it later or find yourself financially worse off in the long run? By no means am I saying you can never treat yourself, just make sure your reasons for purchasing are legitimate. Are you just trying to get that shopping fix? The instant gratification that makes you feel good at first, but once it wears off you feel guilty or realise you made a mistake. Give yourself time to think about larger purchases, it’s so easy to get caught in the moment.

Live a minimalistic lifestyle

My favourite example in regards to minimalism is youtubers. I grew up watching youtubers start to make a lot of money / the beginning of gifted products and sponsorships. They would have these huge makeup collections and closets, me being in my late teens, I really wanted it to. But why? realistically, you will never use all of the makeup before it expires and I always rotate the same clothes. It was so easy to get caught up in wanting what someone else had. Now, I would much rather have less, but good quality items in my wardrobe/makeup stash.

Pay off your debts – The Snowball Method

Don’t keep putting off paying what you owe because you want to buy other things. Especially when you have debt on a credit card that is charging you interest, or being in your overdraft. The snowball method focuses on making a payment towards smaller debts first. For example; You pay £50 monthly on one credit card and £200 on a loan. You would focus on clearing the smaller debt first, then use this amount to pass onto the next debt to pay more off. Each time you clear a debt, you keep using the value to pay off the next debt, e.g. loans & mortgages. There are some great visuals on Pinterest if you would like to learn more. I would say this is especially important for those time sensitive debts that are costing you more each month. Whereas a car loan for example, you will still get charged the interest even if you paid it off early. But still great to have more disposable cash, if you want to focus on paying things off early.

Money is a tool

We see the expression ‘money doesn’t buy happiness‘ thrown around all the time. However, we do need it to survive, therefore it plays a big part in our welfare. A study conducted in 2010 by Princeton researchers, found that as salary increased, once it surpassed $75,000 it didn’t make much impact on their emotional wellbeing. Whereas if you compare the difference between someone earning minimum wage and £40k, it will highly affect their quality of life. It’s not about making you happy, it’s what you are able to then do with it. The more you worry and panic about not having enough you are putting more energy into just that – not having enough money. If you are able to happily support yourself on minimum wage and live a life you enjoy, then so be it! Don’t feel it holds any value over you. I’ve had times of having near enough zero in my account and also having 5 figures in there, I can honestly tell you I haven’t felt any different. Am I able to do more of the things I want in my life when I have more money? Absolutely. Would it allow me more freedom if I was financially independent from a 9-5 job, yep!

Your past doesn’t have to be your future

Even if you had bad money habits in the past, it’s never too late to change your ways. Your credit rating will gradually build if you practice good money habits, even more so if you start paying off your debt. You are completely in control of shifting the trajectory you are currently on. So be confident and take control!

Align your goals with your budget

If your goal is to buy a house within the next few years, but you never save any money. It’s just not going to happen. Go back to your monthly budget and workout what you can save on. Do you need to give up the subscriptions, can you cut back on buying clothes? There is always a way. It may take time, but it will allow you to reach your goal. Use the snowball method and then use that newly spare amount to save each month.

Be PROACTIVE

Don’t hide from your situation, that’s not going help you get anywhere. You will most likely end up just having to pay more and more interest and your credit rating won’t improve. If you are spending too much, make cutbacks. OR you can choose to earn more money – can you get another job, got a review coming up? Ask for a raise, if you can justify the reason for it. You will never know if you don’t ask.

Create income streams

The next step to earning more money is to diversify your income. Start a small business, YouTube channel or blog. These are all things that are out there for you to choose to start. They won’t be a quick fix but who knows where it will take you over the next few years and so on. There are so many opportunities now, we don’t need to rely on just our jobs as a sole means of income. I think a lot of people realised this in 2020, losing their jobs due to coronavirus. You never know what’s going to happen, being in a ‘normal’ job doesn’t guarantee security. MUST READ: How To Start A Blog

Set goals for yourself

If you don’t set goals or have any budgeting/savings plans you will most likely end up spending your money with having nothing to show for it. Whereas, if you said I am going to save for this dream trip in the next 2 years. If you budget realistically, there is no reason you can’t take that trip! MUST READ: How To Crush Your Savings Goals

Get educated

If you feel you don’t understand a lot of the concepts or how different financial products work, learn! The internet is a wonderful place where you can learn about anything – make sure it’s a trustworthy source.

Start with these books about money mindset:

Think and Grow Rich* by Napoleon Hill

Rich Dad Poor Dad* by Robert Kiyosaki

The Latte Factor* by David Bach

Money: A User’s Guide* by Laura Whateley

Are you improving your money mindset in 2021? Do you have any big savings goals this year?

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12 Ways to Transform Your Money Mindset

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Hayley | 27 | South East, UK 🇬🇧 Self-Development & Lifestyle Blogger 🌺🌍

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