The importance of your mindset in building wealth

We all have a money story. It's the things we've learnt from our parents, memories that elicit strong emotions around money, and habits we've picked up along the way. These can be positive or negative, and our mindset around money influences us more than we realise. 

Let's take a look at how our money story influences us…

It's funny how we pick up habits and traits from our parents. As we age, we start doing and saying things that they would. It's as though we're slowly becoming our parents! We take on similar worries to what they had, use the same sayings and jokes, and sometimes even adopt physical gestures in certain situations.

Have you ever considered what mindset you have developed around money? What beliefs about money have you inherited from your parents or developed as a child? These can be positive and help you towards your goals, or they could be holding you back without you knowing. 

Do you tell yourself that you're bad with money? Perhaps you have negative generalisations when referring to successful people, or you joke about your own inadequacies around finances.

One's mindset around money influences decisions and behaviours in ways that aren't always so obvious to us. It's valuable to try to understand why we do some things because your money mindset will determine your future financial success. 

What is your money story?

Take a moment to think about any memories you have from your childhood that revolve around money. This could be something your parents told you, how they acted in certain circumstances, or how the lack (or excess) of money made you feel in a particular situation.

Perhaps you remember your parents telling you that you can't afford something and that "only rich people" do that—or a sense of fear regarding tax season or being told that financial independence is simply a dream.

Write down these memories and spend time thinking about how they influence your actions and decisions today. Some memories may seem trivial, but the chances are good that you've held onto a belief or habit, even if not in your conscious mind.

Not all memories and stories are bad. You should have some great gems amongst them - lessons you've learnt that will help you in the future! But, we can still question these to check whether they're valid for the phase of life that you're in.

The thing is, we are wired for habits, and we generally act in a certain way based on a trigger. We do things without thinking, and we may be sabotaging our own financial success by managing our money on auto-pilot.

We need to traipse through memories and money habits and look for patterns that relate to our lives at present. What is holding us back? What actions and beliefs do we want to change? How can we develop a better mindset towards money and build a positive relationship with our finances? All these questions tie in well with Morgan Housel's book called The Psychology of Money:

"Your personal experiences with money make up maybe 0.000000001% of what's happening in the world, but maybe 80% of how you think the world works." ~ Morgan Housel

8 tips to develop a positive relationship with money

Here are 8 practical ways in which to develop and improve your relationship with money. Use these as part of your strategy to improve your finances and grow wealth.

1. Forgive the past

We all make mistakes, and thinking back on our past experiences may have brought back memories of poor financial decisions or regrets.

The first step towards building a positive relationship with money is to be kind to ourselves: accept our mistakes, learn the lessons, and take the next step towards financial success. 

2. View money as a tool

Rather than a source of stress or anxiety, money can be used to achieve your goals and improve your quality of life. When you learn to see money this way, it becomes easier to make smarter financial decisions rather than being driven by fear or greed.

3. Spend money based on your values

A big contributor to a positive relationship with money is how we spend it.  We need to spend money on things that we value -  the things that are important to us, like our children's education, quality family time or owning a home. Spend with intention.

4. Be content with what you have while dreaming     about the future

It's easy to fall into the trap of constantly wanting more, but this only leads to a never-ending cycle of dissatisfaction. When you learn to be content with what you have, you're less likely to overspend or make impulsive financial decisions. Back this with a solid financial plan, and you'll soon start achieving your goals! 

5. Discuss money with your spouse or partner

This is often a contentious topic.  How transparent should you be, and how much should your partner know? We can't answer that fully, but if you're in a long-term relationship, one would expect trust, openness, and shared values. We'd suggest sharing openly with your partner about your money plan for the month. Also, share your financial priorities, savings goals, fears around money, strong points, and weaknesses.

Find a way to manage your money as a couple so that each individual is happy with the arrangement and understands their contribution. Finances can cause a lot of tension in a relationship, and the best way to tackle this is to be open and honest with each other.

6. Reduce anxiety with processes

We all have anxiety about money, whether it's around our monthly spending plan, investment progress or taxes. Find ways to ease this stress by creating systems that address the issues. This can include automated payments to ensure your bills are paid on time AND automating your savings.

Another way to reduce your anxiety around money is to outsource the stress and anxiety and partner with Momentum Velocity Club. Our team of money experts is here to support you with trustworthy advice and a personalised Money Plan set for your personal needs. 

It's quick and easy to book a free Zoom session. Just click here.

7. Invest in your well-being

As an income earner, you become responsible for others. Family needs arise, and financial expectations can weigh heavy. While it is a privilege to be able to help, don't forget to look after your own well-being first. Allow yourself the luxuries you plan for, give yourself the time off you deserve, and spend some money on yourself as part of your short or longer-term goals.  

8. Give your money the focus it deserves

Life can be hectic, and it's easy to lose track of things as months fly by, but remember that you can't change your financial situation overnight. It requires consistent effort and patience. It is essential to keep your focus on your long-term goals rather than getting bogged down by short-term setbacks.

Building wealth requires partnering with people who can help you reach your goals. Folk who know you, understand your context as a professional in South Africa, and take a personal interest in you. 

That's what we do at Momentum Velocity Club - we build a relationship with you and coach you through big and small financial decisions. We're a dedicated team of professional financial advisers, and we'd love to meet you if you haven't yet scheduled a free session with us.  

Book a free introductory chat and see how we can partner with you.