What is your money mindset? Do you have a sense of your overall approach to money? Are you aware that how you think about money impacts the decisions you make day to day and month to month?
Today I want to share a different perspective on your relationship to your finances – one you might not have come across before. It can be a powerful frame through which to understand the part you play, consciously or unconsciously, in your financial experience.
Becoming more powerful in the way we create and use our wealth is a vital part of our mission here at One of Many, and is a priority for women globally.
- Globally, women control a staggering $36 trillion, and that number is growing.
- According to the National Association of Women Business Owners, one in five firms in the US with a revenue of $1 million or more is woman-owned.
- Across the pond in the UK, the Office of National Statistics reports that “women accounted for an unprecedented 80% of the new self-employed between 2008 and 2011”, and that number has continued to rise.
As more and more women become active participants in the global economy, whether through managing our own business or playing a part in leading others’ organizations, our relationship to our finances matters.
When it comes to money, what’s your motivation?
Money is a subject that often involves a lot of unspoken assumptions and judgments, going right back to childhood.
Perhaps when you were growing up you were told “we can’t afford it” as a way of saying no to things you wanted.
You might have been raised hearing sayings like “A fool and his money are soon parted”.
Money might have been used to confer approval or value – like being given an extra allowance if you did well in exams, or extravagant presents to cheer you up.
As an adult, some of these inherited beliefs will continue to inform your feelings towards money. Contrary to a common misconception, money certainly isn’t a “dry” or “emotionless” topic (and the best accountants aren’t people devoid of feelings!). The numbers we see when we look (or don’t look, as the case may be) at our bank statements can evoke powerful emotions.
And it’s those feelings about money, both what we have and what we haven’t got, that contribute to our money mindset.
Action: Take a few moments to jot down a few ideas about how you relate to money, using these prompts as your starting point.
When I was a child, money was…
When it comes to making money, I believe it’s…
People with money are…
When I think about my future finances, my biggest wish is…
The answer to the final question is what we’re going to take a look at in a bit more detail now.
What is your money mindset? The quick test
Take a look at your goals for your finances and ask yourself this question: do they mainly reflect a “towards” or “away from” mentality?
Here’s what I mean by that: A “towards” mentality means that you’re motivated by something you’re working to.
This can apply to any area of your life, but in financial terms it might be a goal like:
- Going on holiday
- Having 3 months of living expenses in savings
It could also be something more general:
- Understanding investments
- Feeling confident talking about my finances
The key thing is that the motivation is all coming from that inspiring vision of the future and all the good it brings.
An “away from” mentality is the opposite: this is the motivation that drives you away from a place you don’t want to be.
Perhaps your goal is more like:
- Stop having arguments about money
- Never having to think twice before spending
- Getting out of debt
Can you see the difference in those statements?
Why your motivation matters
You can’t think about “stopping money arguments”, without focussing on the arguments and the pain they bring.
If your drive is “to get out of debt”, you’ll only have enough motivation to get you out of debt… and then no further.
This “away from” mentality is one I often see in entrepreneurs I work with. Business owners can find they’re really fired up by hitting rock bottom, or by starting out with very few funds in place. Lots of small businesses go into overdrive when the cashflow dries up – suddenly, we’re out there meeting clients, making sales, and getting creative with new marketing ideas.
The trouble with this kind of motivation is that when you do reach a place of stability, your momentum flags.
Suddenly, you no longer have the “wolf at the door” to drive you forward. The business loses energy, things start to slip, and before you know it the bottom line’s taking a downward turn… until you get to the next crisis point.
Even if you’re not a business owner, you might relate to this mindset. Perhaps you’re highly aware of your family’s finances when you’re watching every penny you spend. But when a payrise gives you a boost and you’re no longer worried about money you find yourself making purchases and financial decisions without a second thought. And then, whoops – overspending.
Changing our relationship with money
Financial freedom doesn’t mean freedom from thinking about money. It means beginning to think about money in a different way. One of the most fundamental shifts we can use is to shift our motivation to a “towards” approach.
What are you working towards? You might have some quick material ideas in mind:
- Paying off the mortgage
- Going on holiday
- nvesting in something that will make a real difference to your day to day life.
But beyond that, there’s a future which involves a relationship with money. When you think about your goals, start to make that a part of the picture, and to reframe it using a “towards” mindset.
“Never having to worry about money” might become “Feeling confident about the decisions I’m making for my money” or “Being supported by experts who can give me good advice about my money”.
When you think about your future, can you imagine “Knowing that my money is working hard to create opportunities for my family”?
Going deeper when it comes to money mindset
It might sound like simple linguistics. And on one level it is.
The deeper level to take this to, is when you can release the feelings underneath the away from motivation.
In our example again –
- When you transform the hurt under the money arguments, you will automatically experience freedom in your communications
- When you heal the pain of having nothing as a child, you won’t constantly find yourself thinking twice about whether you can now “afford” every purchase
- When you let go of the guilt you feel because of the debt you’ve accumulated, you’ll find a freedom to get creative and build your wealth.
I’m really curious about which of these mindsets you currently identify with most when it comes to your finances. Share your reflections in the comments below, and let us know what your “away from” drivers are, and perhaps what your “towards” motivation might look like. Let’s inspire each other!
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