I want to let you in on a little secret. Everyone struggles with money in one way or another. It doesn’t matter how much or how little we earn—no one is immune. We don’t realize it, because it’s too taboo to talk about so we sit around thinking that we’re the only ones struggling.
This was me! I studied finance in college and then worked in financial services and I still didn’t know anything about my own money. As I started my own money journey and shared what I was learning, countless others reached out to share that they were struggling with the same exact issues.
While most of us didn’t get any real money education to prepare us for something that we deal with almost every day, I found that the numbers part of it was actually really simple. It’s basic math. Money in minus money out = building wealth, losing money, or staying in the same place.
But if it were actually that easy, the average American would have more than $400 saved. Yes, that’s a real statistic. The average American has less than $400 saved, at any age.
“The average American has less than $400 saved, at any age.”
So what gives? Why do so many of us know what we should be doing but can’t seem to make it happen? It’s our money mindset. Our money mindset is made up of our attitudes and beliefs about money and ourselves. These factors determine our money relationship and the results we see because how we think about something shapes how we interact with it and the actions we take.
Here are two money mindset shifts to transform and de-stress your relationship with money for good.
The language we use
The language we use around money is really important. When we shift our money goals to be intentional acts of self-love, rather than acts of restriction and self-deprivation, it becomes much easier to take the actions that get us closer to reaching our goals. The journey is in noticing the language, reframing it, and moving forward.
The phrase can’t afford is a great example, and we hear it all over the place. “I wish I could go on a vacation, but I can’t afford it,” or “I can’t afford to buy that new outfit.” When we use the phrase “can’t afford,” it affects our entire demeanor because it comes from that place of scarcity and lack. We are insinuating that we want something but can’t have it. We immediately feel deprived.
While there are some things that we truly can’t pay for, in many cases, we technically could afford the item or experience that we’re talking about by not spending money on other things, or by using some form of savings or financing. In most cases, we are actually choosing not to purchase it.
“Choosing not to” is a much more powerful phrase, and it’s usually true! We are choosing not to take the trip or buy the new piece of furniture because it will take away from another goal or even put us in a financially stressful situation.
When you choose not to do something, it comes from a place of power and abundance—a healthy money mindset. You’ve weighed your options and chosen the alternative that will bring you more long-term joy and happiness.
It’s already more than enough
A scarcity mindset is our default when it comes to money. When we’re in a scarcity mindset, what we are earning will never be enough. There will always be more things and more experiences that we need or desire, so we’ll always want to be earning more.
Most of us would absolutely love to double our salaries. Not only would we love it, but we’d also believe that it would be the solution to all of our money problems. Think about it. Don’t you? If your salary doubled, you’d be able to afford the things you want, you’d start saving meaningfully, or you’d finally get out of credit card debt. This is an illusion.
According to a study conducted at Vanderbilt University, the bankruptcy rate among lottery winners is quadruple what it is for the general population. Within three to five years after winning the lottery, too many people end up right back where they started or even worse off.
“A scarcity mindset is our default when it comes to money.”
We can’t just outearn our spending. This is our scarcity mindset in action—and scarcity doesn’t work. We restrict ourselves, tell ourselves no, and then eventually rebel and derail ourselves. Not only does this not work for our goals, but it also deprives us of joy in our lives, because we get stuck in a cycle of making impulse buys, feeling terribly guilty, and then repeating the pattern all over again.
Moving to a mindset of abundance stops this cycle. It’s a subtle shift, but people report that they just stopped craving, wanting, or needing things that they used to purchase. The serial shopper stops feeling the need to shop. The self-proclaimed coffee addict takes a different route to work and skips the coffee. Why does this happen?
When we come from a place of abundance, we already have more than enough. We let go of all frivolous spending—however you choose to define it. We become aware of how much we already have. We’ll take out many of the expenses in our day-to-day lives, but it won’t feel that bad. It’s a truly eye-opening exercise.
Ashley Feinstein Gerstley is the founder of the Fiscal Femme and the creator and author of The 30-Day Money Cleanse.