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Updated October 9, 2023

Improve Your Money Mindset: 9 Tips to Transform Your Relationship With Money

Improve Your Money Mindset: 9 Tips to Transform Your Relationship With Money

Improve Your Money Mindset: 9 Tips to Transform Your Relationship With Money

Mike Zaccardi, CFA, CMT

Mike Zaccardi, CFA, CMT

Personal Finance

Building and maintaining a positive relationship with money is no easy task. Open any social app and you’re sure to see influencers, friends, family, and frenemies showcasing their best lives, often consisting of perfect beach getaways, exciting purchases, and one success after another. (What you likely won’t see though is much in the way of financial transparency. How much debt are they taking on to live these insta-worthy lives?) 

The Psychology of Wealth

While mastering your finances is no easy feat, especially with the cost of *gestures broadly* every single thing going up, research finds that your relationship with money typically takes hold at a young age. How you grew up and what your parents did with their money establishes financial beliefs in children, and those philosophies about wealth permeate into adolescence and adulthood. Before embarking on a path toward financial independence, you must do some psychological prospecting to unearth why you see money the way you do, only then will you be in the right mental state to adopt a positive attitude about your financial goals for the long haul.

Let’s dive into 9 steps that are sure to help you relieve your financial worries and adopt a better money mindset.

1. Recognize your past

Think back to when you were a kid. How was money seen? Was your family like so many others – getting by week-to-week while clipping coupons? Or were your parents fortunate enough to spend on the niceties of life and provide you and your siblings (if you have any) with the coolest toys, stylish clothes, and awesome summer trips? Were they thrifty and frugal? Or was living with debt and spending their means just a way of life? Was money discussed out in the open? Or was only talked about in strained conversations and hushed voices?

That environment, evidence shows, shapes who each of us becomes later in life, and that goes for our views on money, too. It’s not so much about letting go of the past, but rather about understanding it and embracing experiences, whether they be good or bad. 

2. Dismiss the myths and know your worth

Along with reflecting on your childhood and sifting through why you feel the way you do, you might encounter limiting beliefs. “Oh, you’re not smart enough to figure out investments.” “You’re not good with money.” “Math isn’t your thing.” These are just some of the falsehoods that are fired at so many young people today (especially those in minority groups). 

They’re wrong. You are just as talented as the most successful people you see on social media and in the limelight. In fact, by just taking a few small, but significant, money moves, you’ll have a leg up on most people when it comes to getting on the road to financial independence.

3. Delve deeper into your emotions

If your goal is to be better with money, you should first determine your “why.” Once you’ve uncovered your purpose and what emotions are driving your motivations, then you can align your finances with your values. 

For example, if debt stresses you out, then maybe make it a mission to pay it down by a targeted date. If you feel the need for independence, then perhaps check out the FIRE movement. No matter the mountain you seek to climb, take a moment to reflect on how you feel about wealth and identify any negative emotions or beliefs that may be holding you back. By addressing these heady issues head-on, you can make more rational financial decisions and avoid impulsive behavior driven by fear or anxiety.

4. Boldly take on your challenges

Ok, now that you’ve gotten the softer side of money under your belt, you can get down and dirty to clean up your personal financial situation. Learn about strategies to pay down debt the best way, calculate your personal savings rate, build up an emergency account, and fund your 401(k), Individual Retirement Account (IRA), or Health Savings Account (HSA). Getting started investing early engrains positive habits that can last a lifetime.

And by no means should you feel as if you must do all of these at once. Simply paying off one credit card balance, for instance, is a huge win that emboldens you to face and defeat your next money foe.

5. Ignore the Joneses

Being healthy with your finances often means resisting the urge to want what others have. “Keeping up with the Joneses” is a phrase that describes our innate envy of the good parts of others’ lives. It actually dates back to the early 20th century, and it feels more powerful than ever now. But crucial to developing and keeping a positive mental mindset is to ignore those Joneses...chances are they aren’t that happy anyway! Indeed, comparing yourself to others leads you down the path of unnecessary spending and financial disappointment. Living within your means is key.

6. Base a budget on your values

Now that you are homed in on your goals, you can create a budget that is in lockstep with what you want to be one day. You have the power to be wealthy. You can be the boss. You can live out your dreams of landing that big promotion at work and taking adventurous trips around the world. You can retire early and on your terms. 

But all of these money missions require a solid game plan. A values-based budget - one that allows for enhanced spending on activities and things you love while minimizing costs related to areas you don’t get much joy from - will not only help you save more but also make your spending more meaningful and intentional.

7. Get help when you need it

Financial advisors are great, but that’s not what we’re getting at here. Find a money mentor. It could be an older family member, a confidant, or maybe even a pro financial counselor. Sorta like going to therapy, it helps just to have someone to talk to who might offer words of wisdom from a unique perspective – that can have a mega impact on your wealth attitude.

8. Embrace a growth mindset

Set huge goals. Like totally ridiculous ones that seem daunting. Write them down. Then, also jot daily affirmations or quotes that mean something to you. The combination of looking forward to a brighter and wealthier tomorrow along with daily reinforcements is like a CrossFit sesh, building up your mental money muscles. Embracing empowerment also leaves your brain little room to dwell on past mistakes.

9. Practice gratitude

Expressing gratitude can significantly bolster your money mindset. Focus on what you have rather than what you lack. Be thankful for your financial progress, no matter how small, and celebrate your achievements along the way. Gratitude can shift your perspective and bring a sense of abundance into your financial life. Few things feel better than humbling yourself after hitting a goal, then partying that you did it.

The Bottom Line

You own your future. Harnessing a positive relationship with your money is step 1 toward living a rich life (both financially and otherwise). At Allio, part of our mission is to provide financial wellness for all people. Whether you are paying down debt, saving for a near-term goal, or investing to earn long-term wealth, it all begins with improving your money mindset. 

Remember, the power to change your life lies within you, and with some positivity and dedication, you can hit all your goals and achieve financial freedom.

Allio’s mission is financial wellness for all. You can get started today by downloading the app and automating your investing strategy with Allio. 


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