1. Identify Your Habits
Most people are a product of their environment.
Though we might move halfway around the world, we’ll always carry elements of our upbringing wherever we go.
In many regards, our mindset towards money is a received trait. For example, if you were raised in a family that consistently struggled to make ends meet, you’ll likely harbor a frugal financial attitude — even if you have a good job and a robust savings account.
But here’s the good news: mindsets are malleable, no matter how you were raised.
In the world of education, for example, enhanced mindsets have a highly positive impact on test scores. In fact, a recent study shows that students who actively developed a “growth” mindset achieved higher scores in all major academic subjects (including a 60-point boost in reading).
Here’s a challenge for you: see if you can identify the influences behind your money mindset. Spend some time reflecting on your upbringing, even if it drudges up some uncomfortable memories and emotions.
Why is it so important to look to the past?
Because no amount of budgeting and discipline can overcome a deeply-embedded, negative mindset towards money. We can’t white-knuckle our way to success if we don’t truly believe we can change for the better.
To help jumpstart the conversation, consider asking yourself one of these questions:
- When I was a kid, how did my parents and extended family talk about money?
- How did I feel about it at the time?
- How do I feel about it looking back?
- What financial habits did my parents/family practice that I want to continue in my life?
- What financial habits did my parents/family practice that I want to avoid in my life?
Once you identify your habits and uncover your philosophy towards money, you can more easily let bygones be bygones, forgive past wrongs, and get excited about what’s ahead.
And what is ahead, exactly? Simply put, your ability to enhance your money mindset and fulfill your financial potential.
Over a century ago, John Jacob Astor remarked, “Wealth is largely the result of habit.”
He was right then, and his comment still holds true today. In a recent survey, 97% of surveyed millionaires revealed that they all share the same fundamental trait: they believed they were in control of their own destiny.
2. Expand Your Knowledge
It’s no secret that Warren Buffett is one of the world’s most successful investors.
Though his wealth is well documented, his recipe for success is simple: he reads books. A lot of them.
In fact, he used to read about 500 pages every day, claiming “that’s how knowledge works. It builds up, like compound interest.” That’s why other moguls like Bill Gates, Mark Zuckerberg, and Elon Musk invest much of their time consuming the written word.
As author Charlie Jones put it, “*Leaders are readers. You’ll be the same person in five years as you are today except for the people you meet and the books you read.*"
While reading may be the fastest way to expand your financial knowledge, that doesn’t mean you need to tackle massive tomes like The Wealth of Nations.
Instead, start with easily digestible books that simplify the complexities of the financial world. If you have certain websites or blogs you like to follow, include them in your reading regimen.
And if you don’t have the time to crack open a new book, take advantage of audiobooks and podcasts to learn on the go.
Note: If you have a financial professional in your inner circle — whether in your family or local community — don’t be afraid to ask for their advice and guidance!
3. Define Your Goals
While self-belief and confidence often determine success, they also need to be supported by tangible goals.
Unfortunately, the act of goal-setting can easily turn into an exercise in discontent.
“If only I had X, Y, & Z — then I’d be truly happy!”
We must free ourselves from judging our present circumstances. While remaining grateful for what we have, we can enthusiastically chart a course for where we’d like to go.
Once that destination is firmly in mind — whether it’s the potential of opening a new business, the promise of building a home, or the dream of enjoying retirement — we can set short-term obligations to help us steadily reach our future.
That means paying down debts, increasing credit scores, establishing emergency funds, and building budgets.
All of these goals — whether set for the next week, the next year, or the next decade — begin with a renewed money mindset. Once your financial philosophy is clear, everything else will eventually fall into place. It’s simply a matter of time.
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