Bayport Blog

Debt solutions start with how you think about money

We are socialised to believe that our financial stress will be over if we earn a bigger salary, marry a rich person or once the kids are out of school. In fact, solving your money problems start with your money thoughts.

Your money mindset is simply your beliefs, usually subconscious, about money. It’s the way you approach earning, saving, spending and sharing in your life. These beliefs also determine your financial habits.

There are two basic money mindsets: scarcity and abundance.

In a scarcity mindset, you are always worried about money and paying the bills, you need debt help, you complain about paying taxes, and your personal budget never balances. No matter how much your salary is, it never feels like you have enough.

When you talk about money, this is probably what you say:

• I’m not good with money, that’s why I can’t save.

• Money sucks – I never have enough and it makes me sad and angry to even think about it.

In an abundance mindset, you appreciate what you have and enjoy being generous with others. You have confidence in your ability to make and receive money. You know there’s always enough, and there will always be more. You don’t worry over bills or unexpected expenses.

When you talk about money, this is probably what you say:

• I love learning about money and finding new and better ways to make my money work for me.

• I can take charge of my finances by paying my money the attention it deserves.

How to change your money mindset

Once you know what your mindset is, you can change it – and your money habits – for the better.

Here are 8 ideas:

1. A positive money mindset starts with appreciating what you do have: a roof over your head, food to eat, clean water and a closet full of clothes. Spend more time appreciating what you have than worrying about what you don’t and you will feel abundant in no time.

2. Change your internal money story. For instance, when it’s tax season, tell yourself how fortunate you are to earn enough money to pay tax. Or when you pay your bills, say to yourself “there’s always more where that came from”.

3. Create your own luxury. If you can’t afford a fancy dinner out, dress up for the meal you are having at home, light some candles, put on romantic music and enjoy every moment.

4. When you are under financial stress, it can feel like money is nothing but hard work. To help you shift into an abundance mindset, start a fun fund where you save for things you usually say you can’t afford, like eating out or a new pair of shoes.

5. Keep learning about money, like how to get out of debt, build an emergency fund, and work with your personal budget. This sets you up for success no matter how much you earn or how much you spend.

6. Give some of what you have to others. Donate to a cause you believe in, treat a friend to coffee or give a homeless person a meal. When you give even a small amount of money away, you shift your thinking from scarcity to abundance.

7. Write down all the “free” money you get, such as a discount on groceries, a friend buying you a drink, or a buy-one-get-one-free special. Add it all up once a month and enjoy how good it makes you feel about money.

8. Surround yourself with people who have an abundance mindset. Not only are positive conversations about money inspiring, but you can learn from other people’s healthy money habits too.

The fact that our thoughts determine our actions is true for our money habits as well. So, while you rework your budget to get your debt solutions right, also work on your mindset. A shift into abundance will make your financial stress less.