Managing our Finances can be one of the most challenging parts of being an adult. While it is true that many of us will experience ups and downs when it comes to our financial situations, there are definitely some who experience the highs and the lows of finances to a greater extreme. Some individuals may continue to struggle with their finances while others will only see their finances flourish.
Of course, the reality is that certain individuals will financially-speaking have a much easier time with this, perhaps due to certain social economical differences, there is also another factor that tends to contribute greater to an individual’s ability – or inability to manage their finances – and that is a person’s mindset.
Here are 4 ways that a Mindset can Influence your Financial Stability.
1) Being in Denial vs. Being Honest About your Finances
The first scenario where mindset can affect your financial stability is whether or not you are honest with yourself about your finances. Sometimes, individuals tend to want to avoid their financial affairs, especially when debt has become a factor. Not only if it that they avoid the realities of their finances, they even lie to themselves about how bad things really are. Not only will this allow you to fall further and further into debt, it can negatively affect many other aspects of your life.
If your mindset is that you want to pretend your finances are not in as rough shape as they are, this will certainly influence your financial stability in a very negative manner. Alternatively, you should take steps to clearly identify how much debt you have and address it head-on. The sooner you do this, the sooner you can take action and find a solution to your debt issues. To get things back on track, create a budget and continue to monitor your spending, instead of avoiding the situation altogether.
2) Always Living in the Moment vs.Thinking about the Future
Another example of how a certain mindset can through off your finances is to always be living in the moment versus thinking about the future. While it is nice to not always have to be planning ahead and not being able to enjoy spending some of your money, the downside to always living this way, is that you might wake up one day and find you don’t have enough money to pursue some important goals.
By switching your mindset however and remembering to think ahead about your financial goals, this will provide you will a much financial stability down the road. Some examples of how you may want to think about our future include, saving money for an emergency fund, looking ahead at how much you will need to be a homeowner, as well as planning for your retirement, and so on.
You may also choose to set up an investment where you transfer a small amount of money each month. In turn, this money will continue to grow in interest, which can be very beneficial for you over time.
As mentioned, you don’t want to spend all of your time thinking ahead and not being able to enjoy yourself. So with that being said, you can strive to find a balance between these two scenarios to maintain financial stability.
3) The Need for Instant Gratification versus Being Patient
These days, many of us are more accustomed to getting the things we want a lot more quickly than in the past. With cell phones and the internet enabling us to find and do what we want with the simple click of a button, this has contributed to the fact that we crave instant gratification and have trouble with putting in the time and waiting.
While this is not always the case with everyone, there is a growing lack of patience – even so when it comes to money. If you are of the mindset that you want to earn a lot of money or you want to buy something NOW, this could wreck havoc on your finances.
Additionally, we are constantly comparing ourselves to others. How much money do they have, what kind of car do they drive, how big is their house? This however, is a dangerous road to go down, as it can lead to overspending and buying things we don’t need, in order to keep up with others.
Instead, by adopting another perspective and only focusing on your personal financial situation and doing what is financially smart for you, this can help you avoid debt and other money-related issues.
Ultimately, by taking small steps towards larger financial goals, you are less likely to rush into making major purchases before you’re ready. In the end, you should try to avoid comparing yourself to others and how much they have and instead aim your focus on yourself and your own financial goals.
4) Believing That You Are Alone vs. Asking for Help
Finally, if you are of the belief that you have to struggle with your financial difficulties all on your own, this can definitely lead to further hardships, in terms of going into more debt, even continuing to feel hopeless about your situation.
However, just because you may be responsible for the negative situation you find yourself in, you don’t have to face it alone. An alternative mindset to take on is to turn to family and friends for support. Remind yourself you don’t need to be too ashamed to ask for help, as many people will encounter financial issues in their lifetime. With that being said, if confiding in people close to you is not an option, or you do feel uncomfortable about it, then seeking help from financial experts is also another valuable course of action.
There are many financial and debt-relief specialists who can help you find solutions to your debt problems. They can access your specific financial situation and find one that works for you. It is also important to remember that if something doesn’t work, together you can find another method.
Ultimately, however by asking for help and not going it alone, you can find strategies that can actually make your finances more manageable, also helping to restore the hopefulness you feel surrounding your ability to improve and maintain your finances moving forward.
While an individual’s mindset has been likely to change from time to time, it truly does have the ability to impact how successful they are in various aspects of their lives, including their finances.
Even if you are someone who starts out with a negative mindset when it comes to your finances, remember you do have the ability to change your thinking and approach your finances in a more positive manner, thus improving your overall financial stability.