Why Money Mindset Matters (+6 Steps to Improve Yours Today!)


You’re the same age, make the same income, and have the same relationship status and overall lifestyle. Yet they are financially flourishing while you’re struggling. What gives? 

And to that, I say – how’s your money mindset?

You can budget up the wazoo, but if you don’t believe you deserve or are worthy of financial stability, it’ll be tough to hit your financial goals. 

But the good news is that mindset is changeable. 

This article will introduce the concept of a money mindset, explore why it matters and how mindsets form and provide seven actionable steps you can use to improve your money mindset today.

Ready to reframe your money mindset?

What is a money mindset?

Money mindset is your relationship to and beliefs about money that shape how you manage your finances. 

Your money mindset plays a big role in things like whether you:

  • have an inclination towards saving, spending, or a balance of both
  • monitor your finances frequently, or don’t think about them at all
  • are stressed about debt to the point of inaction or have a plan in place to conquer it
  • experience envy and jealousy when observing others’ financial abundance, or feel inspired

In other words, your money mindset influences every aspect of your personal finances, often manifesting in high or low self-worth.

Which is why it’s such an important concept to know.

How is a money mindset formed?

The formation of a money mindset is primarily a subconscious process influenced by three factors: 

  1. Personal experiences
  2. Community
  3. Society

For example, if you grew up in a wealthy family that openly talked about finances and how to cultivate cash properly, you likely have an abundance mindset, feeling secure in and respecting your money. 

In contrast, if you grew up smack dab in the middle of a recession where there was never enough…of anything, you may develop a scarcity mindset, whereby every purchase, whether a $2 pack of gum or an $18,000 car, is made with anxiety and fear.

But whatever the story or specific influence, your life experiences and the era you experience them shape your mindset – often unbeknownst to you.


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    Healthy vs unhealthy money mindset

    You may have noticed that I used “abundance” and “scarcity” when describing the mindsets developed under differing life circumstances.

    These are also known as “healthy” and “unhealthy” money mindsets.

    Make a note of anything that makes you say – “oh hey, that’s me!”

    Unhealthy money mindset

    When you have an unhealthy mindset, you firmly believe there will never be enough money and that financial success is totally out of your control. 

    You may also be intimidated by financial topics, fearing anything you read or are taught will be way over your head. And so you never start your journey towards long-term financial security, focusing on the short-term balance in your bank account.

    With an unhealthy money mindset, the following phrases may run on repeat in your head:

    • I’m broke
    • I don’t deserve to earn more money
    • People in my field never make that kind of money
    • Money is a man’s world
    • All wealthy people are snobby and shallow
    • All underprivileged people are hardworking and noble
    • There’s a limited supply of money in the world
    • I’m behind everyone else and will never catch up, so why bother?

    Healthy money mindset

    When you have a healthy mindset, you firmly believe that you will achieve your financial goal and are worthy of such an achievement. 

    You prioritize long-term financial wellness over short-term gains or hazards and continuously educate yourself on improving your process. You enjoy a balance of saying no when something doesn’t align with your goals but can say yes to what does align without fear or guilt. 

    When you have a healthy, or positive money mindset, you may exhibit the following: 

    • Recognize that every financial situation is fixable
    • Appreciate the value of asking for help instead of struggling silently
    • Accept that even small steps add up to progress, even if it’s slow
    • Acknowledge that the only financial story worth comparing yourself to is your own

    Why is money mindset so important?

    The significance of a healthy money mindset is brilliantly summed up by Napoleon Hill in his book, Think and Grow Rich:

    “There are no limitations to the mind except those we acknowledge. Both poverty and riches are the offspring of thought.”

    In other words, your beliefs shape your behaviors.

    Money is no exception.

    If you believe you can save, you will. If not, you may not even get as far as opening a savings account, let alone obtaining financial freedom. 

    And if you’re having a minor panic attack thinking your own mind has you doomed for life–take a deep breath. 

    Everyone can change their money mindset. 

    I’ll teach you how. 

    How to change your money mindset

    Changing your mindset toward wealth requires reflecting on and changing how you think, act, and present yourself to the world. 

    It can be an uncomfortable process. But it’s 100% worth it. 

    Over the rest of this section, you’ll work through six steps to identify where your money mindset is today and implement an action plan to level up.

    1. Reflect on how you got here

    Before you can begin the process of changing your mindset, you first have to know your starting point. 

    Do you have an abundance mindset or a scarcity mentality?

    To answer these questions, journal through the following prompts. And be honest! No one but you will see your response–so there’s nothing to hide. 

    As part of this first step, ask yourself:

    • How did my parents manage their money? Were they in debt, big savers, or ruthlessly frugal? 
    • Did we talk about money growing up?
    • What language did my family use to discuss other people’s wealth? Were the wealthy admired and everyone else rebuked? Or were wealthy people selfish and everyone else honorable? 
    • How did I manage my own money? Did I rack up debt, live paycheck-to-paycheck, or save money?
    • Do I make more than my parents? How does that make me feel?
    • Does the term “wealthy” seem attainable to me?

    Now compare your answers to the following table. 

    If you used more words in or related to the left-hand column, you lean towards a positive money mindset. And if you find the right-hand column more relatable, an unhealthy money mindset. 

    characteristics of a healthy vs unhealthy mindset

    2. Express gratitude

    After identifying where your money mindset stands, it’s time to show some gratitude.

    As best said by Germany Kent:

    “It’s a funny thing about life, once you begin to take note of the things you are grateful for, you begin to lose sight of the things that you lack.”

    No matter where you are on your financial journey–I guarantee there is something to be grateful for. And the more grateful you are, the more ease you bring into your life, including financially. 

    So what are you grateful for?

    For some inspiration, here are a few financial factors I am grateful for: 

    1. The means to afford an apartment that keeps me and my furball safe, dry, and warm
    2. The means to invest in personal development via books, travel, and classes
    3. An employer that offers 401(k) contribution matching, helping me reach retirement that much faster

    Your turn.

    show gratitude

    3. Visualize achievement 

    Within two steps, you’ve already identified your starting point and taken steps towards improvement simply by expressing gratitude. Now we really begin to level up. 

    Step 3 on the road to a healthy money mindset is visualization. 

    If you’ve ever run a marathon or played a sport, you’re probably familiar with the adage: success is 10% physical and 90% mental. 

    This applies to money as well.

    Reaching your financial finish line requires more than just setting up a plan. 

    This may work in the short term, but for long-term success, you have to know the why behind your goals and then visualize yourself living a day in the life of your why.

    For instance, if your goal is to pay off credit card debt, your why may be so that you can afford to take your family on vacation. Your related visualization is you and your family strolling down the beach, hand-in-hand, with giant smiles on your face. 

    What’s more inspiring than a smile on a loved one’s face?

    4. Head to the library

    Your mental game should be strong at this now. 

    Next step: supercharge your confidence in your money management skillset. 

    From personal finance blogs like this one to books by money experts, to podcasts, to talk shows, tons of resources (suitable for all budgets!) are available to improve your financial toolbox. 

    Start with just one to avoid getting overwhelmed or burning out. 

    Pick one podcast episode. One book. One blog article. Take at least one thing away from that resource. Then, implement it in your life. 

    And then move on to the next one.

    Here are a few tips and recommendations to get you started:

    5. Open forum

    Welcome to what may be the most uncomfortable of all the steps: talking about money with your friends and family.

    But by doing so, you’re not only improving your financial literacy by learning what has and hasn’t worked for others, but you’re also expanding your money mindset by seeing what people in similar circumstances and life stages have accomplished and, thus, what you can do too. 

    As a bonus: talking about money with your partner can make for a healthier, more fulfilling relationship, with 78% of couples who talk about money on a weekly saying they are happy, vs. only 50% of couples who discuss money only a few times a year, or never.

    Ready to embrace the unknown?

    Here’s a list of topics to discuss during your next girl’s night or date night:

    • Budgeting and money management tools
    • How to ask for a raise and how much to ask for
    • How to negotiate a salary at a new job
    • Practical techniques for saving money
    • Educational resources like books, podcasts, and blogs
    • Financial worries you’re struggling with

    I know these conversations won’t be easy, but they are worth every nervous bead of sweat or awkward moment of silence.

    Your money mindset will thank you.

    6. Give yourself props

    Rather than beating yourself up for not starting your financial journey sooner, nd choosing to spend money willy nilly and incur heaps of credit card debt, or not having an inkling of how investing works..try something new.

    Forgive your past financial mistakes and financial decisions, and give yourself credit for every positive step you take.

    “Too many people overvalue what they are not and undervalue what they are.”

    Malcolm S. Forbes

    Instead, set a monthly money date on your calendar to reflect on where you earned, saved, and paid off or incurred debt. Pat yourself on the back for even the smallest of improvements, adjust what needs adjusting, and move on with your life. 

    This gives you a dopamine hit that will leave you wanting more–rather than the fear that you’ll never reach your goals. 

    Did you pay off 1% of your student loans? Did your debt not increase for the first time in months? 

    Those are wins in my book. And they feel mighty good, huh? 

    I bet you now want to beat those accomplishments next month, don’t you? I have every confidence that you can do just that and more.

    💡Hint: If you’ve made it this far in the article, you’ve already improved your money mindset tenfold by showing up for yourself. Celebrate that!

    Your money mindset matters. Treat it accordingly.

    If you feel like you’re taking all the right actions but not making any leeway on your financial goals, it’s probably worth reflecting on your money mindset.

    Can you see yourself, ten years down the road, debt free and well on your way to retirement? Or do you picture yourself shackled to your desk for the next 30 years? 

    Take some time to figure out the answer to these questions and build a plan to get to where you want to be. 

    And remember: Be kind to yourself every step of the way, no matter your starting point. It’s never too late to heal your money mindset.

    Your financial future will thank you.

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