“Watch your thoughts, for they become words; watch your words, for they become actions; watch your actions, for they become habits; watch your habits, for they become character; watch your character, for it becomes your destiny.”   Lao Tzu


As Lao Tzu, the Chinese philosopher subtly points out in the above quote, if you focus on a topic intently enough, it can literally transform your life. This is especially true regarding money and finances, yet so often people operate from a mindset of lack when it comes to this topic. To change our financial circumstances, the actions we take must be accompanied by a belief that we can create financial abundance in our lives. So what does it mean to have a “money mindset?” Simply put, it is the attitude that you have about money and finances, which can have a significant impact on your ability to achieve your financial goals. Generally, this mindset around money is entrenched when we’re young and impressionable and we end up carrying it with us - often unconsciously - long into adulthood, and it colors all of the financial decisions we make. Even with the best intentions to eliminate debt, increase saving and achieve wealth, with a negative mindset about money, it can be difficult to overcome challenges and make better choices that will lead to financial abundance.

The difference between having a positive mindset about finances and a negative one directly affects the course of action you choose to take when faced with a decision. A positive outlook towards your finances empowers you to be decisive and take action towards what is necessary to improve your financial life; i.e., pay down debt or save a percentage of your income. Having a negative outlook however is a breeding ground for procrastination and contributes to feelings of overwhelm, defeat, and causes you to be fearful of taking the steps necessary to achieve your goals.  

When you shift your thinking and ask yourself good questions with the expectation of better results, your mind will begin to search for and deliver the answers to match your expectation of an improved financial reality. So how do you develop a great money mindset?

Change Your Script

The first step is to work to change your “script.” A script can be a conscious or unconscious pattern that we have repeatedly told ourselves, without giving it much thought. If you think of your debt and automatically feel defeated, or have told yourself, “I can’t afford that,” or “I don’t make enough money to save,” then you’re operating from a negative script about finances. You might have even adopted these scripts from parents and not even known it. For example, have you ever heard the phrase, “Money doesn’t grow on trees?” If so, you might have been told that by a well-meaning adult, trying to instill a sense of fiscal responsibility in you, but it could have had the adverse effect, that is, instilling in you a belief that there is not an abundance of money or that money is always in short supply. To paraphrase Lao Tzu’s quote, “Thoughts become words, words become actions, actions become habits, habits become character, and character becomes destiny.” See the relationship between your thoughts and your ultimate destiny? A money mindset truly begins in your mind, and all of your actions will follow to fulfill that destiny. It’s up to you then to work to train (or retrain) your mind, to begin to practice engaging in the kind of mindset that will lead to a more abundant destiny.

Become Solution Oriented

Another way to improve your money mindset is to begin to train yourself to become “solution-oriented.” What does this mean? Being solution-oriented simply means, instead of focusing on the problem and getting stuck there, shift your thinking instead to what possible solutions exist for the financial challenge that you’re facing, and taking an active approach to solving it. Whether you’re $3,000 or $30,000 in debt, you can still strategize ways to eliminate it. You may have a sub-500 credit score, but that can be improved over time and with a plan. When you adopt a solution-oriented approach to finances you’ll begin to understand that any circumstance can be overcome or improved and you’ll look for opportunities and make decisions that will help to make that happen.

Be Proactive

Become proactive about planning the direction of your money. Money needs a focus and direction, and it’s up to you to have the discipline to direct your money in the direction you want so that you use it to achieve your aims. You’re not a slave to money, you’re its master. Begin to be vigilant about tracking your income and expenses. Know what is coming in and going out every month and after you’ve accounted for your basic necessities, make sure that you direct your money to pay down debt and/or save and invest for your future. If you don’t have a plan for your money, you’ll continue to have a vague idea about its purpose, and the result will be a needless squandering of a resource that should instead be working for you to improve your future.

Eliminate Emotional Spending

Another way to achieve a money mindset is to recognize and eliminate emotional spending. Frequently money - more specifically, spending it - becomes a salve for other areas of our life in which we’re suffering in, or having a difficult time with. The issue here is that you can fall into a trap of using money to provide temporary relief to an issue, but end up paying for it later, like in the form of large credit card payments, interest charges, and fees if those payments cannot be made on time. Much like indulging in a pint of ice cream repeatedly can lead to obesity, so too can indulging in emotional spending lead to a whole other set of financial problems down the road.

Education, Mentors and Tending Your Garden

There are some additional factors that can influence you creating a money mindset for yourself. The first is to begin to make learning good money and financial management skills a priority. Your mind is a sponge, so feed it the kind of information that will help you become financially smarter and savvier. Do this by reading topical books and magazines on whatever financial subject interests you most. Take an online course. Listen to podcasts. Do whatever you can to impress on your conscious and subconscious mind an abundance consciousness.

It’s been said that we are the average of the five people we spend the most time with. So think about finding a mentor who can help guide you on your desired path. It should be someone who has accomplished something that you’d like to accomplish yourself. Perhaps a boss or colleague, for example. Think about joining an investment group or a meetup that focuses on wealth-building. Start surrounding yourself with like-minded people who are already living the values that you would like to emulate. Ask for advice from only those individuals that have already achieved what you would like to. Make this a habit and over time, watch your life transform.  

Like anything else, creating a money mindset takes work and commitment. You’ll need to have patience with yourself as you’re building a new (cognitive) muscle. Think of it as tending to a garden; for the fruits, vegetables, and flowers to flourish, you need to create the right, environment. In this case, these steps act as the soil, water, and sunshine that provide a fertile environment for your wealth consciousness to take root, grow, and bloom.