‘A mindset is defined is a set of beliefs and attitudes we hold that, once activated, drive behaviour.’ ~ ‘Take the Handbrake off your Success’ Suzanne Mercier, Founder and CEO of Purpose to Profit.
Last month I was privileged to be involved as a panellist in the FPA Women in Financial Planning Mindset session. As a financial planner, I help pre-retiree single women manage their financial affairs and achieve financial independence. But my personal history and background as a psychologist has shown me the importance of developing the right mindset to successfully gain control and feel secure in our financial world.
How to create your money mindset
Understanding how your life experiences affect your relationship with money is the first step to taking control. Your money mindset is usually formed early in life; people either subconsciously repeat their parents’ attitudes, or do the exact opposite. Learning to recognise and work on changing your money mindset will help you achieve better financial results.
Step 1: Think about your individual relationship with money and write down any worries, fears, behaviours or beliefs that may stem from your upbringing.
What experience did you have with money growing up?
When you think about your money, what concerns, needs or feelings come to mind?
Are you a spender? Worrier?
How do you make decisions when you make large or small purchases?
When you think about your finances, what are your biggest concerns?
What are your best and worst financial decisions?
What keeps you awake at night?
Step 2: Understand the intricate details of your finances
Income: How do you make money today? What is the source of your income? How is this likely to change in the next three years?
Expenses: How much do you spend per month? How is this likely to change in the next three years?
Debt: How much you owe on your car, student loan, tax etc?
Assets: What property do you have (e.g. real property, art, collections, jewellery)? What new assets do you expect to receive (from inheritances or share options)? How are your assets structured (i.e. personal, company or trust)?
Super: How much do you have and where is it held?
Insurance: What is covered and who holds the policies?
Saving: How do you save or set aside money?
Investment: What is your strategy for handling your investments? How do you benchmark your performance? Are you on track to achieve your financial goals?
Step 3: Describe your ideal you
How do you see yourself?
Where do you live?
What car do you drive?
Who are you spending time with?
Do you work? If so, where and doing what?
What is your lifestyle? Your hobbies, relationships, communities etc.
What are your goals and aspirations?
What does success look like to you?
Would you rather enjoy your lifestyle now or have plenty of money in retirement?
What are your goals and dreams?
What’s most important to you?
What do you need to do to become your ‘ideal you’?
What would it mean to you to achieve this? How will you feel if you don’t?
By understanding your WHY, you are on the right track to determine the steps to take to achieve your best life.
Step 4: Turn your dreams into achievable goals
Write down your goals.
Work out exactly what it will cost to achieve them and in what time frame.
Identify the thoughts and behaviours that stop you from achieving your dreams.
How committed are you to achieve your goals? Now write down three ways you can help overcome your obstacles.
Visualise your goals every day. Research shows that people are more likely to stick to savings plans when they see their goals on an ongoing basis.
Step 5: Just do it!
Take action.
There are many simple financial planning strategies that will help you achieve your financial goals.
To transform your life, you need to change your mindset. As Suzanne says,
‘We must first have mindset, then the skills we develop, the hard work we put in, the focus and the ability to persist in the face of challenges flow from that mindset.’
Learning to understand, think and speak about money in a positive way will improve your resilience, positivity, safety, security and resourcefulness. It will create an optimistic and confident outlook and your increase self-worth. And that’s always a good thing!
If you would like more information on creating a positive and successful money mindset, contact Natallia on 03 8648 6534 or email contact@truwealthadvice.com.au
General Advice Warning: The information in this communication is provided for information purposes and is of a general nature only. It is not intended to be and does not constitute financial advice or any other advice. Further, the information is not based on your personal objectives, financial situation or needs. You are encouraged to consult a financial planner before making any decision as to how appropriate this information is to your objectives, financial situation and needs. Also, before making a decision, you should consider the relevant Product Disclosure Statement available from your financial planner.