5 surprising reasons why your money mindset is impacting your finances

Have you ever given thought to your relationship with money? Without a strong money mindset, the best career and business strategies will only take your finances so far.

“It is said that by not doing the work on your mindset around money, you’re leaving thousands, if not potentially millions, on the table in your lifetime,” said Rose Kirby, a wealth and business coach and former McKinsey strategy consultant.

“Even as an employee, you can have all the ‘how-to’ knowledge there is, but actually asking for a raise, sticking to a budget or saving more is still a mindset game because money comes with emotion and we have to manage that first to stop any self-sabotage.”

On the other hand, if you are an employer, you need to understand the mindset of your employees if you expect them to perform well. Depending on the type of the business you run, you might be more interested to know the answers to questions such as ‘how to increase customer retention rate’ or ‘how much does it cost to redirect parcel‘, but knowing what dictates the decisions of your employees can help you motivate them more efficiently.

Whether you’re currently stressed about your financial situation or feeling relaxed or excited about it, there is always room to upgrade your attitude around money and create more abundance as a result. And your financial reality is actually a reflection of your money mindset.

“To put it simply, you have beliefs about money that lead to your thoughts and emotions, which lead to your decisions and actions, and ultimately your results,” said Kirby.

For example, if you tend to think or say things like “you have to work hard to make money” or “money doesn’t grow on trees,” you may be limiting yourself without realising it.

Not convinced you should be prioritising your relationship with money as much as other relationships in your life? Here are five — sometimes surprising — reasons why your money mindset is impacting your finances.

1. You could be potentially working less and making more

“The month I identified my core limiting money beliefs and shifted them, I was able to more than double my monthly income and work far, far less. Even I was impressed with that result! The thing is, we don’t know what’s available to us until we’ve done the work to get into a space and place of more abundance,” said Kirby.

When she left her corporate job to start her business, Kirby was equipped in terms of best practices — she had advised multi-million dollar companies in her role at McKinsey. But her thoughts and feelings around money were holding her back.

“I felt awkward asking for money, guilty when someone paid me something, and I was undercharging because I was scared I wasn’t good enough to charge more.”

Becoming aware of her money mindset allowed her to get out of her own way and helped her increase her income.

2. Your money mindset is a reflection of other areas of your life

“If you feel you’re not good enough to charge more or ask for a raise, then chances are you’re also not feeling good enough to find your ideal partner or leave toxic friendships,” said Kirby.

If there are parallels between the way you approach money and the way you treat things like your health and relationships, you could be stuck in a vicious cycle in terms of your productivity levels and career performance, not to mention your overall happiness.

The good news is that the opposite is also true.

“The secondary effect of improving your money mindset makes it even more worth doing the work. And when you understand your money mindset, you’re able to understand your partner’s too, which is really important because money issues are a top cause of divorce.

3. Feeling guilty about having more than others is holding you back

Even if your career is doing quite well and your net worth is increasing, you may be subconsciously hitting the brakes out of guilt.

“I’ve seen people self-sabotage when they have ‘too much’ because they feel guilty for having more. I believe more money in the hands of good people is only ever a good thing,” said Kirby.

Remember that money is a resource that allows you to give back and elevate the quality of life of your loved ones as well.

4. Believing money is not that important is impacting your money management habits

It’s true: money won’t buy you happiness. But it allows you to decide where you will live, how you will live, when you will retire and more.

So believing there are more important things in life than money doesn’t mean you shouldn’t prioritise your finances or think about your financial decisions.

“You’re allowed to make money important to you. Not because of the money but because of what the money makes possible for you. If you don’t know how to manage $10, you won’t know how to manage $500,000, so it’s never too early to work on your money mindset,” said Kirby.

5. Repeating your parents’ money patterns affects your future

You most likely picked up your money beliefs and habits as a child by observing the adults around you.

It’s crazy to think that circumstances you had little control over at such a young age can have a big impact on your future. But being aware of your money mindset allows you to build more empowering patterns.

“If your parents struggled with money, by creating a really good relationship with money for yourself, you literally rewrite the course of your family’s future because your children will most likely adopt your money habits too,” said Kirby.

This article was originally published on The Ladders.