How do you feel about money? Are you happy with your finances? Enjoying abundance? Or worrying about how to make ends meet? If you are looking for tips to transform your finances, these money mindset shifts will help you.
If there were only one thing to take away from the money lessons I learned as a young adult, it would be this one: accumulating wealth is not about how much money we make but what we do with it.
My parents were not wealthy and had poor financial education. I did not meet anyone doing exceptionally well financially until I started working in a large corporation.
As a young professional, I was surrounded by rich people, the kind of people who make millions per year. Observing their lifestyle and understanding their money mindset helped me transform how I consider money.
The notion of “new rich” is not related to their age but the relatively recent acquisition of wealth.
The new rich are self-made, come from non-privileged backgrounds, and create wealth through their habits and thinking.
If you want to transform how you consider and use your money to improve your finances and become part of the new rich, this post will help you understand some essential concepts.
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1. Understand that saving and investing are not sacrifices
Most people struggle with this when trying to change their money mindset.
Saving money and making long-term investments are often perceived as sacrifices. Indeed, if you are serious about saving and investing, you need to prioritize your spending and lower your expenses.
This is often seen as a sacrifice because one usually struggles to have a long-term perspective.
Investing money will offer you many great opportunities in the long term. It will make your money work for you. It’s basically like having your own money-printing machine.
You will get that new car, the fancy holidays and much more. You just need to wait until you have financial security before spending your money.
2. Stop thinking in terms of “not enough”
Beliefs can be very limiting, which is also the case regarding money. You seriously limit your success by thinking that you don’t have enough.
Transform negative beliefs such as ” I don’t have enough experience to be a successful investor” into positive questions “How can I gain enough experience to become a successful investor?”
This simple mindset shift will open so many doors, transforming your limiting beliefs into unlimited opportunities for growth.
3. Find ways to afford things
Another essential money mindset shift is looking for additional income streams.
Instead of depriving yourself of buying something new, ask yourself how to make enough additional money to pay for it.
This is a simple but effective way to ensure you spend your money without compromising your future.
Yes, you can get that new car, but you must first figure out how to pay for it without buying it on credit or taking the money from your emergency fund. This is as simple as that.
4. Stop working for money
Most of us still need that 9-5 job while building new income streams. This is perfectly fine as long as you keep in mind that you should not work for money only.
Working for money only will keep you stuck in the rate race. Instead, you need to see your work as an opportunity to grow and learn valuable skills.
Working for money alone will not make you rich. Investing your salary, developing new skills, and minding your own business will.
Understanding that your job, no matter how well it pays, will not make you rich is essential to the money mindset shift required to become wealthy.
5. Make your money work for you
As your salary alone will never make you rich, you need to invest as much as possible to create additional income streams.
Investing can be overwhelming. This is something no one is taught in school. Still, this is what makes the difference between a highly educated person stuck in the rate race and a college dropout retiring young.
You should consider investing early on if you want to retire young. Look for the best platforms, ask for professional advice and give it time.
6. Invest in your financial literacy
Your financial education will matter more than how much you make when it comes to keeping money.
Money comes and goes. The hardest part of the journey will not be making money but keeping it. You can invest in books and listen to podcasts to improve your financial literacy.
Some of the best personal finance books are :
- Rich Dad Poor Dad by Robert T. Kiyosaki
- Quit like a millionaire by Kristy Shen
- The 4-hour workweek by Timothy Ferriss
- You’re a badass at making money by Jen Sincero
- Thinking, fast and slow by Daniel Kahneman
- The Millionaire Fastlane by MJ Demarco
- The automatic millionaire by David Bach
These books are a great start to changing your money mindset and improving your education.
7. Pay yourself first
Paying yourself first is the easiest way to make sure you save money.
If you have not created an emergency fund yet, you should start saving first. Save a portion of your income immediately after receiving it until you have 3-6 months of monthly expenses.
This simple step will help you spend less and build wealth.
Once you have saved enough, you can start investing 10-30 percent of your income. This will be a game-changer for your finances.
If you cannot afford to save/invest 10-30 percent of your income, it’s time to rethink your spending and look for additional income streams.
This post on 52 ways to save money will help you lower your expenses to save and invest more.
8. Use your money instead of spending it
Another critical money mindset shift you will need to build wealth is to change the way you spend your money.
We all love nice things and are tempted to spend money every day. To build wealth, you need to think about using your money to accumulate more wealth.
This simple change to your habits will transform your finances. Instead of spending money to buy things you want, look at what you can be doing with that money to make even more money.
You will rapidly realize that seeing your bank account and investments grow is more rewarding than owning new things.
9. Create your own system
Creating your own system and minding your business is essential to building real wealth. As Warren Buffet once said :
If you don’t find a way to make money while you sleep, you will work until you die.
Creating your own system will offer you one or multiple passive income streams, which is the best type of income.
It’s like printing your own money, and there are no limits on how much you can make. If you are eager to retire young, you need to focus your energy on creating multiple passive income streams and reinvesting the money earned.
10. Learn about how others got rich
If you are anything like me, you probably love stories of self-made millionaires. Reading is something the most affluent men and women on Earth have in common.
It improves your literacy, develops your creativity, and transforms your vision of the world. Learning about how others made it is a fantastic way to witness the creation of significant wealth from scratch.
It is also a great way to find enough motivation and inspiration to kickstart your own journey.
11. Understand that your salary alone will not get your rich
This is something I had a hard time understanding as a young adult.
I had spent so many years studying and working hard that I couldn’t accept that I was not taking the fastest path to build wealth.
As kids, we are always told to go to college or university to get a solid education, find a well-paying job, and enjoy fancy vacations a few weeks per year.
This is the path the majority will try to follow, hoping to create wealth. The truth is that the well-paid job you will find will keep you in the rate race if you don’t invest your money.
As an employee, the more you earn, the more you’ll spend because of lifestyle inflation, and the more you will pay taxes.
Having a job you like and a steady income is great, but that alone will never get you rich. Instead of putting all your efforts into finding a better-paying job, understand that you will never get rich unless you invest your money wisely.
12. Surround yourself with more affluent people
This is the money mindset shift that will transform your money history. Surround yourself with more affluent people and people who love money just as much as you do.
Negative people are often so narrow-minded they can kill your ambitions and become energy drains.
Surround yourself with people richer than you and learn from them. People with money are usually more comfortable talking about it, which will help you in your journey.
13. Treat money like one of your best friends
To improve your finances, you will need to consider money as one of your best friends.
Take time to understand where you stand financially, make a budget if you don’t have one, calculate your net worth, review your spending habits, look for new investments, etc.
If you want to make your financial health one of your priorities this year, you need to take time to review your finances at least once a week.
This simple habit will help you be more mindful about your money and spend less.
14. Understand that money means security
For a long time, I considered money a means to get nice things. Money didn’t mean security to me until I got my own place.
I had nights during which I couldn’t sleep because I wasn’t sure to have enough money to make ends meet.
After receiving a bonus, I finally created an emergency fund and enjoyed the security offered by having enough money to cope with any unexpected expense!
This level of security makes life easier. Understanding this will transform the way you consider money.
15. Think in terms of time, not things
This money mindset shift is the one that helped me save the most money. We often say that time is money, but we rarely convert the price of things into time.
That handbag might cost $300, but how many hours do you work to make that money? Is it worth it to exchange 2 days of work for one handbag? Or even worst, trade two years of work for a new car?!
If time is money, then when buying things, most of the time, you will exchange time for clutter.
This simple mindset shift transformed my shopping habits.
16. Understand there is no limit to the money you can make
Another mindset shift that will significantly improve your finances is understanding that there are absolutely no limits to the money you can make.
Just because you didn’t graduate from college doesn’t mean you cannot create your own business and make a lot of money.
Just because you don’t know anyone who created his own business doesn’t mean you cannot do it.
With the internet, anyone can become self-employed. Nevertheless, becoming a successful entrepreneur takes a lot of work.
If you are eager to make it and work hard, nothing can stop you from making money.
17. Talk about money
Talking about money is crucial to improving your financial literacy.
In many cultures, money, religion, and politics are taboos. Although I understand that people do not want to talk about religion and politics to avoid drama, I have never understood why money was such a delicate subject.
We all make money and need money to live, right? Like it or not, money will be part of your life until you die. Then why should we avoid discussions about such an important subject?
Talking about money is a fantastic way to help others and avoid big mistakes such as bad investments or getting into debt as a young adult.
It is also crucial to educate your kids, ensure you and your partner share the same goals, and improve your education.
18. Stop being negative about money
When I started working and got to know people who did well financially, I realized that people who do well hardly ever talk negatively about money.
One might think they have fewer reasons to complain, which might be true. But the main reason is that they see money as a positive tool offering them freedom.
When it comes to making and keeping money, developing the right mindset is key. Thinking positively is the very first step to improving your finances.
Instead of thinking about the limits imposed on you by your lack of money, start thinking about the benefits of making an additional $1,000, $2,000, or $5,000 a month.
This simple money mindset shift will motivate you to find additional income streams.
19. Understand where your bad money habits come from
Habits, good and bad ones, define us. To change your money mindset, you must first understand your bad habits.
In my case, most of my bad money habits came from my childhood. I saw my parents struggle to make ends meet.
I was so happy when I started to earn a steady income that I splurged when I received my paychecks.
I spent a lot of money and hardly saved any during the first 5 years of my career. I even accumulated unnecessary debt because of that behavior. I wanted to make up for all those years I couldn’t afford what I wanted.
Instead of splurging on payday, I now save and invest money even before paying my bills. I am now committed to building wealth so my future kids and relatives do not worry about money.
20. Rewrite your Money Story
Rewriting your own story will be by far the most complicated step of your journey. It involves leaving behind your preconceptions about your social and educational background.
Understand that your past, failures, and education do not limit your success. The only thing limiting your success in finances or life, in general, is your habits.
Change your habits, and you will transform your finances and life.
Getting your money mindset right is essential to financial wellness.
Thanks to the internet, there are now endless ways to make extra money and improve your financial education.
You might think that making more money would solve all your issues. However, you will be unable to permanently fix your finances and level up without a real mindset change.
The internet is full of stories of people who were broke, made a lot of money, and ended up broke again. And this is because while making money is easy, keeping it or using it wisely is the hardest part of the game.
Fixing your money mindset and getting educated is the way to improve your finances.
Are you ready to start turning your finances around? If so, download the free resource below to kickstart your journey!