Stop the Financial Self-Sabotage: How To Change Your Money Mindset
It’s easy to get into an “all or nothing” mindset when it comes to achieving our financial goals. If you made a goal to save $500 every month and you start falling short, your first instinct may be to just give up completely rather than reassess your goal. Our mental blocks can often influence our financial behaviors more than we realize, but it is possible to change our money mindset to break the cycle.
Stop doing these six things that are sabotaging your chances of reaching your financial goals.
Stop Stressing About Your Big-Picture Goals
If you have a monthly or even annual financial goal — whether it’s to save for your retirement, emergency fund or a vacation — it’s easy to give up when you’re faced with a big, daunting number. Samantha Garcia, CFP, wealth advisor with Halbert Hargrove, recommends breaking down large goals into smaller goals to make them feel more achievable.
“If you want to contribute a certain percentage to your 401(k) — maybe that’s 10% — but then you can’t pay your bills, don’t go, ‘I can’t do anything.’ Start at 2% and then if that feels comfortable, go up to 3%,” she said. “When you break it down into smaller steps, one, it doesn’t seem so overwhelming and two, you give yourself the ability to succeed and you get that burst of cortisol that makes you happy. You feel like, ‘Oh yeah, I made that step, now I can keep going.’ You have that rush to propel yourself forward.”
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Stop Giving Up Completely When You Fall Off Track
You may not be at your goal yet, but reminding yourself of any progress you’ve made can help you stay on track and quash those feelings of self-defeat.
“Especially if you’ve just fallen off of a goal, go back to the successes that you already had and remember that you’re not starting off at zero,” Garcia said. “Say you’re on step six of 10 that you’re hoping to get to and you fail at six. Well, then you’ve already succeeded at five. Remember those small wins and celebrate the wins when you get them.”
Stop Having Unrealistic Expectations
Stanley H. Teitelbaum, Ph.D., financial therapist and author of “Smart Money: A Psychologist’s Guide To Overcoming Self-Defeating Patterns In Stock Market Investing,” said he often sees self-sabotaging behavior related to investing.
“Investors frequently self-sabotage by having unrealistic goals and expectations,” he said. “If your account value falters in the short term, it does not have to lead to despair and giving up on your overall goals. This experience can serve as a wake-up call to reexamine, recalibrate and revise your path in accordance with more realistic expectations in line with your appropriate level of risk appetite and risk tolerance, and then maintain the discipline to stick with it over an extended period of time, and not be dismayed by short term changes in your portfolio value.”
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Stop Listening to Negative Influences
Your mindset about money can be impacted by those around you, so it’s important to be cognizant of this and make sure you are staying true to yourself and your goals.
“Be aware of the impact others have on you,” said Jay Zigmont, Ph.D., CFP, founder of Live, Learn, Plan, a financial planning firm based in Mississippi. “The classic is a family member or friend saying, ‘You deserve a new car’ or a similar purchase. These purchases may set you back and off of the path of your goals. Watch out for them and realize that your goals may be different than theirs.”
Stop Telling Yourself the Same Money Stories
We often make judgments about money or our financial circumstances without thinking about why we hold these attitudes. Taking the time to do some introspection can help break harmful patterns.
“Slowing down our thinking process can help put our financial lives in perspective,” said Derek Hagen, a financial therapist and founder of Money Health Solutions. “We tell ourselves stories, mostly subconsciously, that impact our behavior. When we fall behind or get overwhelmed, it’s helpful to adopt a curiosity mindset. That is, get curious about why we want to give up. If you can understand what story you are telling yourself, then you can challenge your automatic thoughts.”
Stop Getting Stuck in Your ‘Wealth Box’
Jessica Weaver, CFP, author of “Confessions of a Money Queen,” notes that it can be hard to believe that our financial situation will ever be different than it currently is.
“People struggle because they only know the wealth that they can witness,” she said. “If you grew up poor, then that is the only wealth state you know. This is the wealth box you have been sitting in your entire life. You can only see the next dollar, and the idea of a million dollars is laughable.”
To break out of this “wealth box,” you have to start believing that you can.
“You have to start stretching your wealth consciousness and normalize the idea of earning a million dollars a year,” Weaver said. “The more you can picture greater amounts of wealth, the more you can feel it, the more you will attract it, get educated about it and come into alignment with that amount of wealth. When making money seems easy to you mentally, the easier it will flow to you.”
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