How To Break Free of a Poverty Mindset and Make Your Financial Goals a Reality
Both self-help gurus and celebrated CEOs are known for preaching the importance of an “abundance mindset” versus a “poverty mindset” or a “scarcity mentality.” If you aren’t familiar, an abundance mindset means approaching situations with the perspective that you have infinite resources, while a poverty mindset means you operate with the belief that you don’t have enough or are always running low on what you need.
While it’s unlikely that anyone ever became rich overnight simply by switching from a poverty mindset to one of abundance, it’s also unlikely that anyone who made a fortune or grew a successful business on their own did so while constantly worrying the rug would be snatched out from under them. How can one be productive, or even think clearly, when overshadowed by anxiety?
Ultimately, when it comes to finances, it’s not so much that one needs to embrace an abundance mentality as much as they need to ditch the scarcity mentality. Here are some tips on how to do so, and stop hindering your ability to prosper.
Avoid a Self-Fulfilling Prophecy
“A negative money mindset — that you’re no good with money, that you can’t hold onto money, that you’re stuck in the financial situation you’re in with no way out — these thoughts can be paralyzing,” said financial coach and planner Maggie Klokkenga, CFP, CPA.
Indeed, these negative thoughts can be so powerful that they can actually keep you stuck in a financial rut. “You may not be able to take action, such as asking for that next raise, because you are already telling yourself, ‘What’s the point? I’m just going to spend it all anyway,'” Klokkenga said.
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Shift To Gratitude
“There’s a quote, ‘It’s impossible to be grateful and unhappy at the same time,’ and if you find yourself stuck in a negative money mindset you want to first knock down the momentum of the negativity,” said Will Myers, founder of Freedom Five Financial. “I’ve been trapped in a negative mindset loop before, so I know it well, and if you don’t control it then it just grows on itself and runs like a wildfire. To stop the spread of negative thoughts in our mind, we want to shift the momentum using gratitude.”
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Write Down Bad Thoughts and Change the Language
There are a number of tricks you can implement to help change the way you think about money and break the cycle of negativity. Try starting simply with a pen and paper.
“Write down the thoughts that you have when you think of the word ‘money,'” Klokkenga said. “Choose a statement that you want to change about yourself, such as ‘I don’t know how to stop spending.’ Give yourself minor changes to that statement. For example, your first change may be ‘I know that I overspend.’ The next statement may be ‘I pause and ask ‘Why?’ before I spend.’ The next statement may be ‘I honor my future self by choosing not to spend now.'”
Klokkenga recommends that you practice speaking or writing a new statement each week, and keep jotting down the negative thoughts as they storm in.
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Adjust the Timeline
“Instead of thinking, ‘I have no money,’ you should think, ‘I have no money…yet,'” said Paul Sundin, CPA and tax strategist at Estate CPA. “This makes you more optimistic about your situation and therefore will encourage you to find ways to improve your income and earn more money.”
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Talk To Happy People
“You should also try to change your environment and connect with people who have a more positive mindset,” Sundin said. “Let their optimism and enthusiasm rub off on you so you will get more inspired to uplift yourself.”
“Dissect your parents’ relationship with money and how they talked about it or acted with it as this often shapes your own view toward finances,” said personal finance expert Andrea Woroch. “Identifying what that is can help you break the barriers keeping you from changing your financial outcomes.”
Keep Goals in Plain Sight
“Write them down on a piece of paper that you see daily as reminders or on a post-it note wrapped around your credit card,” Woroch said. “You can even make a financial vision board where you paste pictures of your dream home you want to buy or on your dream trip with your family. These visuals will help you stick to your goals and positive money management will ultimately lead to a long lasting change in your money mindset.”
Tell Yourself a Different Money Story
“Instead of telling yourself you are bad with money, tell yourself you are good with it and then do things to prove yourself right, such as not going on a retail therapy shopping binge,” Woroch said. “This will instinctively cause you to be better with money.”
Take Advantage of the Many Available Resources
You don’t need to come from an abundance mentality to recognize that there is an abundance of educational materials and professionals out there that can help you think about money in a healthy way.
“There are loads of great resources to help you, from my podcast episodes on ‘5 Ways To Instantly Improve Your Money Mindset‘ and ‘Money Goals You Must Set‘ to books like ‘You Are A Badass at Making Money‘ by Jen Sincero,” said Kim Sprague, a business coach and Profit First mentor. “You can also get help from expert financial advisors to reframe negative thinking and take action towards reaching your money goals.”
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