Investing 101

Money Makin’ is a Mindset!

When approaching your personal finances, it’s easy to get caught up in a black & white mindset: income vs. expenses, budgeting vs. splurging, investing vs. saving—Managing your money becomes a zero-sum game and those who follow the strict set of rules win…right?—WRONG.


This mindset is limiting and can actually breed stress, anxiety and ultimately feelings of failure—because for most of us, the road to financial wellness is not as simple as following the rules.


Setbacks are a realty, but that doesn’t mean you should just throw in the towel. Our mindset greatly affects our entire world and in particular our financial world. Research has proven that if you think you can, then the odds are in your favor that, in deed, you can.


Optimism is a positive force on your finances. In fact, optimists are 7x more likely to experience high levels of financial well-being! This is according to a research initiative by Psychological Researcher, Michelle Gielan and Frost Bank in which 2,000 people across the US were surveyed. Results uncovered a surprising key to cultivating financial wellbeing—You guessed it: Optimism.


Why is this? Optimists feel they have the tools to create a positive outcome for themselves. We are not talking about a childlike ambition, but instead a mindset that your habits and behaviors are the why and how behind making good things happen.


The result? Optimists feel better about their money, regardless of how much (or how little) they have in the bank. Not buying it? Gielan’s study found pessimists spend an average of 226 days a year dealing with financial stress, whereas optimists only 81 days. That’s a difference of almost five months.


But Pessimists! Fear not! Research also shows that anyone can learn to be more optimistic simply by embracing the financial habits of optimists. Here’s how:


Let it all out!: Talking is cathartic. By having meaningful conversations about money, you can relieve the burden by realizing it’s not that bad or, start to find some solutions if it really is that bad. 76% of optimists are more comfortable talking about money and are more likely to seek advice from financial experts. Identify one or two people you trust and have open conversations about your financial life with them.


Seek progress not perfection: Set your financial goals and break them down into smaller incremental goals, even if this means setting aside just $10 a week. Every time you make a small step towards your goal, remind yourself that your behavior makes a difference. Financial wellness lies somewhere between having the will and taking the action. Celebrate yourself for taking the action and then continue to celebrate your small wins.


Change your beliefs about yourself: The most difficult part of building long-term wealth?—The lack of immediate satisfaction that makes these good habits feel like sacrifice. That is, unless you change your mindset. Don’t just do the thing—Be the thing that you do are doing. As we highlighted in our takeaways from James Clear’s book, Atomic Habits: It is much easier to start (and stick to) good behavior when you identify with such behavior—meaning you shouldn’t say, “I am saving because I have to…” But instead, “I am a saver.” Make financial wellness part of your identity!


Take the L and turn it into a Lesson: We all have to learn our own lessons (usually the hard way), and according to Gilean, “Optimists are more likely than pessimists to have recovered and learned from their setbacks.” In fact, she found nearly 70% of optimists reported that they implemented improved financial habits after experiencing a setback, compared to only 36% of pessimists. How can we all espouse this mindset? Gilean suggests making a list of the three most stressful events in your life and one positive thing you learned from each, so these challenges become lessons instead of scarring life events. Now, how to apply this to your money: Make sure that emergency fund is set! You’ve likely experienced a setback from that unexpected car repair or the time your dog ate a sock and racked up a $1,000 vet bill. Being ready for the unexpected, so the big “Uh-Ohs” aren’t a big deal is what financial freedom is all about!


Bottom line: Mindset is key, as our brains will find evidence to support whatever we want to believe.  Bring awareness to yourself and start making positive changes today! If you come from a place of abundance, then you will attract more abundance.