In the last article “Basic Money Habits to Start Your Financial Journey,” I spoke about something called a “money mindset.” I’m here to elaborate on that a little more this week. And if you did miss last week’s article, not to worry, you can find it on The Morning website.

What is a mindset, and why is it important?

A mindset is a set of attitudes that you may have concerning a certain experience, situation, or area of life. Have you ever heard the quote “what you think, you become?” That exists for a reason! The right mindset is a critical component in sports, business, life, and – you guessed it – money. There was a study done by Stanford Psychologist Carol Dweck who found that children who believed that intelligence can be developed were able to get over academic challenges more than those who believed that you have to be born intelligent. Another Yale and Miami study conducted revealed that those with positive beliefs around growing old lived 7.5 years longer on average than those with negative perceptions. Now, do you understand the power of your mind and your beliefs?

What is a money mindset?

A money mindset is basically how you have defined what money is and how to deal with it in your mind. Now, these definitions are likely built over time, and most often your money beliefs are quite limited. “Money is the root of all evil,” “money is hard to come by,” and “money does not grow on trees” are definitely phrases you have heard throughout your life, and chances are, this leads to fear about finances, pessimism, and intimidation. The sad reality is that there are quite a few people out there with this type of thinking who do not even realize that they could have the financial security they desire one day if they make the right financial decisions.

Abundance vs Scarcity mindset

A scarcity mindset is when you are so obsessed with a lack of something — usually time or money — that you can’t seem to focus on anything else, no matter how hard you try.

Do you currently resonate with the following?

1. Feeling guilty about past financial mistakes
2. Feeling jealous of how others handle money or their wealth
3. Feeling worried and upset about your current financial situation
4. Believing there is not enough money to go around
5. Making decisions in the short term and not the long-term

If you do – and it is not just a momentary thing – then you probably have adopted a scarcity mindset without even realizing it – most likely from the beliefs you have learned from the grown-ups around you, and subsequently your own experiences with money. Trust me, a scarcity mindset isn’t the easiest thing to change, and I myself and working on it to this day regardless of how aware I am of it, but the sooner we learn to change our thinking, the sooner we change our lives.

I understand that for many, finances are so tight that it is unfair to even ask them to shift their beliefs around money. However, I believe that one has two options – it is either shifting your mindset in a way that will benefit you in the long run or being stuck where you are forever. I personally see only one choice that I need to take if I am to try and get my life in order and reach my financial goals.

Now, on the other hand, we have the abundance mindset, which is what we are trying to shoot for. This is the belief that there is plenty out there for everybody. Unlike people with a scarcity mindset who focuses on what they do not have, a person with an abundance mindset:

1. Will focus on what they do have
2. Will be grateful for what they have
3. Will celebrate others’ successes because they believe another’s wins will not detract from their own
4.  Are willing to learn from others’ successes
5. Will give back to society and to the world in whatever way that they can
6. Very often live in the present moment without being stuck in the past or being worried about the future

Sounds freeing right?

A few ways to get started on your abundance mindset

If you are interested in this journey, then here are some tips to get started.

1. Ask yourself what your financial goals are, visualize them, and then write them down. Your idea of happiness does not have to be the same as someone else’s.
2. Look inwards and examine your own limiting beliefs. What are the negative beliefs you have about money that are holding you back?
3. Adopt more empowering beliefs. Believe you deserve happiness and financial security
4. Work on forgiving your past financial mistakes
5. Learn more when you can about money, and how other people who have made it to their goals did it
6. Make a list of things you are thankful for and go through and add to it daily
7. When something does not go as planned embrace it. If a problem comes up, reframe it positively as a challenge. This is a tough one, but worth practicing, nonetheless
8. Surround yourself with successful people
9. Try to live more in the present moment
10. Truly believe that you can get where you need to – you at least owe it to yourself to try

Well, now that you have some ideas, it’s time to start practicing! All the best 🙂

Written by Nethmie Dehigama

This article appeared in the Happinez Magazine of the Morning Newspaper in Sri Lanka in 2022.

Header Image: Boonmind