The end of the year is a great time to pause, examine the 12 months just gone, and be intentional about your next year. Setting mindful resolutions toward your perfect future. A whopping 48% of UK residents made resolutions in 2023 You have the vision, now use the below to learn about money mindset and how to set realistic goals so that 2024 is your best financial year yet.
Statistics go on to say that the average resolution only lasts 18 weeks and that only one in ten people will succeed in following their resolution through to the end of the year. If you are in the 90% of people continuing on your previous path, then read on. Learn about money mindset, how it impacts your financial life, how you can turn it around and how to set healthy and sustainable New Years resolutions.
Money Mindset challenge
Money mindset is your unique attitude toward money. This mindset controls your financial decisions, whether you save, how you spend, and if/how you invest.
A money mindset is formed in our childhood and originates from our parent’s financial patterns. Like other types of mindset, we form either a positive or negative mindset pattern. Until you delve into your own financial habits, you may not even be aware of what your mindset type is. The positive outlook is that whatever your mindset pattern, there is always room for improvement.
Positive money beliefs
Delve into your life to discover your money mindset. What was your parent’s attitude toward money? Were they frugal? Were the bills carefully paid and anything else saved? Did you go on many family holidays? Did they invest towards the future? Or was money there to be spent? If a bonus was received, it was spent straight away. The family had fun at the time but maybe had to wait a little before doing it again.
Whichever attitude your parents had; it would have had a huge influence on your own money attitude in your formative years. As you are looking toward a new year, now is the time to recognise those beliefs, tear them down, and build new, more positive ones. By using a resolution planner, you can learn about your mindset, set your own self-care and get help setting and keeping your resolutions for the New Year.
Wealth is a mindset. It’s all about how you think. Money is literally attracted to you or repelled from you. David Schirmer (International Public Speaker and CEO
Money mindset mastery
Look at the table below. Then work out both your parents money mindset and your own. Whichever camp you both fall in, you will at least be able to define it and have a goal to work toward.
|Bad money mindset||Good money mindset|
|Anxiety||Willingness to deal with difficult problems|
|Lack of control of your money||Optimism in face of uncertainty|
|Negative attitude towards money||Open to learning|
|Procrastinating – not dealing with difficult financial decisions||Ready to discover solutions|
Most of us start being excited about our financial new year’s resolutions. Then the attitudes we already hold but probably don’t even realise eat into our brain little by little until the demon sitting on our shoulder has firmly shooed away the resolutions and continued with life the same as before. But the positive outlook is that now you know what your existing mindset is, you can plan to change it and take control of your financial future. Follow the below steps to do just that.
1. Create affirmations
Money issues can impact almost every area of your life. The sooner you recognise this, the sooner you can change and improve your mindset. This can be started with setting affirmations. Delve into what would help improve your daily attitude and write them down as bullet journal resolutions. Some examples are below.
- I am open to wealth in all areas
- I am attracting money in all areas in my life
- Money is positive attitude turned into positive action
- I love everything I can do to enhance my life with money
Set your morning alarm five minutes early and use the time to say these affirmations. With a new belief system, comes a new day and a new way.
2. Goal vs resolutions
Next is to examine any bad financial habits you may have accrued over the years, understand why you have these, and break them down to create new, healthy, streamlined ones that transform your finances. It is important to understand existing habits so you can create a long-term goal and be confident of your chances of success. A resolution helps you on your way to completing the goal.
Financial worries do not just pick on people with low incomes. You could be earning a substantial amount and still have bad money habits. 70% of lottery winners wind up broke within seven years. However, once we know the mental reasoning behind spending our money in such a way, we can change this behaviour.
Intentions not resolutions
We first need to be conscious of what we are doing and why. Do you feel powerful when you use your credit card? Does your mind shout at you ‘if you buy that, I’ll be happy?’ Does spending money make you feel wealthy?
Financial habits are often due to snap decisions, the instant gratification part of our brain that says, ‘Yes, we want that purchase’, and ‘Yes, it will make us happier’. In order to change this pattern, we need to know our triggers. What is it that makes us say yes to that purchase? How do we feel once we have bought it? Once we recognise these, we have something to work with.
In order to break the gratification you feel after a purchase you don’t really need; one idea is to substitute rewards for making positive choices. Set a visual savings plan so that you can see your savings accrue. At the end of the month, you can reward yourself with a small purchase. This will help with both your mindset and gratification. But make sure you either use a savings app or set up an automatic transfer from your current account into a savings account.
Now you have daily affirmations and learnt to recognise and break the instant purchases that set you back, you can turn to setting a budget.
In order for a budget to work, you need to know your incomings and outgoings. This could be a ‘You can’t see the wood for the trees’ situation. Your many, irrational purchases, the different bank cards that you hold and old Direct Debits you never got around to cancelling are the trees. They are blocking your view of your financial situation. The clarity comes when, standing before us we see the wood with all its incomes and expenditures laid out in neat rows of trees. Get it?
Financial budget apps
There are many ways of setting a budget. You could create your own, purchase a downloadable one, use an interactive one or install an app. They are all good options but here we are going to take a look at a couple of financial budget apps. Easy to install and set up, they do all the work for you and do not interfere with your busy life.
Simplifi by Quicken is a newcomer but has glowing reviews. With an easy to use and view dashboard, you can easily view your finances and have access to spending plans. It’s aim is to help you see your daily spending and work towards saving and it does just that.
Greenlight is great for children. As they learn to spend and save, parents can watch and make sure they are learning to take control of their finances. The younger they start, the more change they have of becoming financially aware. They can even invest and watch their earnings grow.
Rocket Money is another app that is easy to use. It can help you pay your bills and cancel subscriptions along with showing your daily financial transactions. It stands out because of the bill management service it offers.
Credit Karma is great for those looking to improve their credit score. It will help you find the best credit card deals and insurance deals.
Good budget is a great solution for couples. Your accounts can be synchronized and you can set up joint goals. Whatever you are planning for, a wedding, a house, or a holiday, you can do it together with this app. Perfect!
Once your finances have been inserted into the app, you will be able to see your monthly incomings and outgoings. From there, you can create goals for each area of expenditure. For example, look at ‘entertainment’. What does this include? Meals out, visits to the pub, cinema, or concerts? How much do you spend on this area each month and what percentage of your disposable income does it take every month? From there, you can decide whether this is an area you want to reduce your spending in and how much you could save if you did.
After ‘trimming’ spending in each category, you will see what is left over to save. Once you have followed this for a few months, it should give you the confidence to move onto the subject of savings and how to save well.
4. Best books on money mindset
This is a short and sweet list aimed at those thinking about dropping their resolutions in the middle of January. These self-help books can be picked up and put down as the mood takes you. Giving examples of every possible money block there can be and realistic ways to be the financially successful woman you have the potential to be.
This book by Denise Duffield-Thomas is aimed at women and the woeful issues we often face concerning money. In it, we learn how to break through our money blocks, face our true potential and get on with earning the money we deserve by embracing the mindset we should have had all along. Yes, it’s to do with money, however the mindset behind it can be related to many other areas in our lives. Highly recommend this one.
This second book also sits on my bookshelf and is regularly thumbed through. By Jen Sincero, a New York Times bestselling author, it is inspirational. Written in a blunt, funny manner, it is easy to read. Which is always helpful when sometimes the truth makes us wince. It helps us examine what is holding us back and gives real solutions on how to manifest a new financial reality. The author tells us parts of her story, her previous money blocks, and looks at how she overcame these in order to be a success. It’s well worth the money.
This author of this book is Carol Dweck. The focus is on mindset but instead on delving purely into the area of money it examines parenting, school, business, and relationships by looking at two types of people: those with fixed mindset and those with growth mindset. In it, Dweck examines the difference between the two and how we can use growth mindset to not let failure define us but rather to push us to grow and succeed. It’s decades of research are based in psychology, and it is well recommended.
Your four financial resolutions route to success
By concentrating on improving your mindset, you can learn a lot about yourself, increase your positive outlook and embrace your sustainable New Years’s resolutions Your year ahead is set to be a secure one. To start you on your journey, this resolution planner will take you through mindset, self-care, goal planning, and more. Get ready for your financial wealth to start to flow.