How to make your money mindset work for you

Are your finances at the mercy of a bad ‘money mindset’? Good news – it’s possible to change your thinking and set up a lifetime of rewarding habits. Our experts tell you how.


Ever wondered why you keep buying things you don’t need with money you don’t have? Why you can’t seem to save even though you’re earning a decent wage? Or why you’ve just never got around to investing, despite your common sense telling you it’s a sensible move?

If this is you, or someone you know, it’s likely that your (or their) ‘money mindset’ is to blame.

Your money mindset is, quite simply, how you approach and think about money and financial matters. It is a result of how your immediate family dealt with money when you were growing up and, to a lesser extent, how your extended family, friends and perhaps even your first employer did so.

There are many different ways to view money mindsets – for example, positive and negative, healthy or unhealthy, or scarcity and abundance.

We asked two experts – financial planner Michelle Stone, who deals every day with people making financial decisions, and behavioural economist and psychologist Phil Slade – for their views on developing a healthier your money mindset.

How does a money mindset form?

“It’s very simple how it comes into being,” says Stone, founder of Feel Good Financial Planning.

“Although it’s multi-layered, it’s the family you’re born into who give you your ‘normal’ of what money is.”

“And you either agree and conform with it – or you disagree with it if it’s painful. In that case, you may seek to do the opposite.”

If your parents were constantly worried about money, Stone adds, it’s likely you will share that fear. Or you might become the exact opposite – a spendthrift, as you rebel against what you found to be a stifling approach.

Where do you belong? 

In Slade’s view, when it comes to money mindsets there are three main world views. These are groupies, authoritarians and purists.

As the names suggest, groupies like getting on with the group and believe they are stronger together. Authoritarians like to take the lead, and purists are about ideals and what they believe is the right thing to do.

Slade, the founder of decision-making firm Decida, explains how that looks in practice. A groupie wants to spend on something that makes them look good to the group, an authoritarian looks at the data and find the best bang for their buck, while a puritan spends money on something that matches their ideals.

Can you change your mindset?

When it comes to changing or moving beyond your current money mindset, Slade and Stone agree it can be very difficult to shift a mindset, but it is possible to work with it.

Stone says recognising your own ‘financial programming’ is the first step towards creating a healthier mindset.

“Once you accept what your programming is, you put down what your goal is and then you work with someone who can help you achieve that goal, taking into account your strengths and weaknesses,” she says.

People need to understand that the journey is hard, Stone says, but if they really want to adjust their money mindset, they need to do the work. And that work involves setting goals and mapping out paths to achieve those goals – there is no magic bullet.

Slade says it’s important to remember that approaches to money are based on emotion. “If you can start to look at your emotionally reactive side, you can start understanding where some of the blind spots are, and why, she explains.

Stone says that by learning to recognise and understand how you emotionally react to financial situations, you can begin taking steps to, change your own mindset and behaviours.

For example, people who have recognised they have an unhealthy money mindset that prevents them from saving could set up a regular direct debit into a savings account. By doing so, they have taken the emotion out of individual savings decisions. 

Repeating small actions like this can help change how you think about money, putting you on the right track to a much more positive money mindset. As our experts say, it won’t happen overnight, but it will happen.

Your 4 money mindset takeaways:

  • Identify your money mindset patterns
  • Recognise those patterns are learned – and can be changed
  • Set financial goals to create the changes you want
  • Take the small steps to reach those goals.

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