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11 tips to develop a healthy attitude towards money

Whether you want to become a millionaire or just have enough money to be comfortable, one of the first steps you must take is to improve your money mindset.

How you think about your finances drives your financial decisions – good or bad – and adopting a healthy and positive attitude can help you take positive actions towards it.

Your mindset is influenced by your own experiences but also by what you’ve heard throughout your life. As such, it can take some time to change your thoughts on money, but it’s certainly possible.

This article outlines 11 actionable tips you can take to develop a healthy attitude towards finances.

11 tips for developing a healthy attitude towards money

This article covers all kinds of tips, from countering negative associations by developing a gratitude practice and giving money to a cause to more practical actions such as creating a budget and setting financial goals.

Regardless of your financial situation, you’re sure to find something that will resonate. Let’s dive in.

Conduct a self-audit

You can’t improve or change something if you don’t know where you currently stand. Therefore, to curate a healthy mindset around money, you first need to find out if you have a negative attitude towards it and why.

For example, were you taught that money was bad when you were a child? Are those beliefs based on evidence? Do they hold up, and are they serving you well?

Do you simply binge-spend on clothes and food when you’re stressed? Then perhaps minimising your daily stress levels will help you avoid spending money as a coping mechanism. This self-audit will help you understand how and where to make the change.

Set yourself financial goals

Once you know where you’re starting from, it’s important to set financial goals so you know what you’re working towards. Setting goals is a tried and tested tool that you can apply to all aspects of your life, whether personal, professional, financial, physical health, etc.

By writing your goals down on a piece of paper, you’re creating a written contract with yourself that holds you accountable. It also works as a plan to help you figure out how to achieve this goal.

For example, suppose you have a goal of saving £10,000 in 18 months. You know that you must set aside £555.55 per month to achieve this goal. You can break this down further to determine how much you need to save each week.

The overarching goal of £10,000 gives you a destination to work towards. Still, you can also break it down into smaller goals (monthly and weekly) which can make the big goal seem attainable.

Define what financial success is for you. Do you want to become a millionaire, or do you just want to be financially independent? Once you’ve established your goal, you can break it down into smaller goals and make your first step towards achieving them.

Create a budget with healthy spending habits

A budget is one of the simplest yet most powerful ways to create a positive money mindset. Even still, the word ‘budget’ has a negative connotation for many people. To them, it screams restriction, sacrifice, and restraint, but this is the wrong lens to view it from. Instead, it’s important to view a budget as creating boundaries.

A budget is a simple money management tool that allows you to create guidelines for your spending habits. Without a budget, it’s incredibly difficult to stick to any financial goal or plan. The key to long-term budgeting success is to factor in the things that bring happiness and joy to your life to foster healthy spending habits. This means that you won’t feel like you’re sacrificing anything. Instead, you’ll simply be conscious of how and when you spend your money which can create a positive mindset towards finances.

As a general rule of thumb, a 50-30-20 split seems to work well for most people. This means that 50% of your budget should go towards the basic necessities you need to survive, such as rent or mortgage, bills, food, etc.

30% of your money should go towards things you want to spend money on. This can include online shopping, your daily coffee, gym membership, pottery classes, etc. Whatever it is that makes you happy falls into this category.

Finally, 20% of your money should go towards savings. The 50-30-20 split is a great way to start your financial journey and you can adjust it over time as you better understand your spending habits and financial goals.

An alternative is to use a personal finance app. There are plenty out there, ranging from free to paid ones, which can help you budget and track your spending habits.

Build an emergency fund

It doesn’t matter how well you plan, there are some things that you just can’t account for. Whether that’s your car or boiler breaking down or losing your job, you will encounter expenses that you didn’t prepare for.

It’s moments like this where your emergency fund comes in handy. An emergency fund is a savings pot that you can dip into during – as the name suggests – emergencies. Most people start with £1,000, then £2,000, and slowly work themselves up to three or six months worth of expenses.

Of course, this has the obvious benefit of giving you a safety net should you come across a large expense or if you are made redundant. But it also has the benefit of improving your relationship with money.

Since you’re no longer living paycheck to paycheck, you no longer have that psychological dread that all could go wrong in one second. You have the comfort of knowing you’ll be fine for three to six months should something happen.

This gives you the freedom to spend money guilt-free, whether that’s putting a little extra into your Stocks & Shares ISA each month or buying yourself a nice gift. That little mental switch can create a more positive money mindset which has a knock-on effect on all financial decisions that you make.

Give money to a cause

One of the best ways to change your relationship with money is to give it away to a meaningful cause. Seeing that your money is making a positive difference in the world is a powerful feeling, especially if you thought you’d never be in a position to do so.

You don’t have to start big; a few pounds a month to your favourite charity or mission is all it takes to know that you’re making a difference.

Develop a gratitude practice

Gratitude is a known practice that can help people learn how to have a positive mindset. Countless studies have documented how it releases you from toxic emotions, reduces anxiety, depression, and stress, and produces a positive outlook on life. The great thing about a gratitude practice is that you can apply it to your financial situation.

If you’re just starting out on your financial journey, it could be gratitude for taking the first step. It could be gratitude for having a financial goal to work towards or gratitude for having enough money to meet your current basic needs.

If you’re well into your journey, it could be gratitude for your progress or for bouncing back from previous financial mistakes.

By shifting the focus from a negativity bias (focusing on what you don’t have) to a positivity bias (focusing on all that you do have), you will drastically shift your attitude towards money from scarcity to abundance.

You can create a gratitude practice in various ways. The most popular method is to keep a gratitude journal. This will allow you to reflect on every entry you’ve made, which can help you when you feel down. But you can also simply thank yourself mentally, write yourself a letter, pray, or meditate.

Read books on finance and money

Reading has various benefits, with studies showing that it can improve your brain function, fight against Alzheimer’s disease, and make you more empathetic. Additionally, it is also one of the best ways to acquire knowledge.

It’s why Bill Gates reads around 50 books per year, Warren Buffett is said to read for five to six hours per day, and Mark Zuckerberg completes a book every two weeks. As if running billion-dollar companies wasn’t hard enough, some of the most successful people in the world still take time out of their busy days to improve their knowledge through books.

Therefore, reading personal finance books will not only positively impact your brain and health, but you’ll also develop your financial literacy. You’ll develop a positive attitude on the topic by nourishing your brain with positive financial information. You’ll also better understand how money works which can help you make better financial decisions, reinforcing your attitude towards money.

Money is neither good nor bad, it is neutral

We’ve all heard quotes such as “money is the root of all evil”, “money isn’t everything”, “rich people are greedy and steal from the poor”, and “money won’t make you happy”. These are beliefs that paint acquiring money in a negative light.

On the surface, quotes and beliefs such as these may seem harmless. But in reality, they can have a significant influence on your actions and may subconsciously result in situations where you avoid acquiring money. For instance, you may avoid asking for a pay rise, or you may receive a bonus but feel like you’re not worthy, or you may spend money as soon as you receive it. These are all unhealthy attitudes towards money.

On the flip side, you may have heard quotes that hold money in reverence. They believe that money is the solution to all their problems and view their financial situation as a metric for their happiness and success. This is an equally unhealthy attitude towards money.

Instead, understand that money is neither ‘good’ nor ‘bad’. It just is. What you do with it is what determines its meaning.

Don’t be too hard on yourself

There’s a chance that you’ve never made a financial mistake in your life, but there’s a much higher chance that you have – and that’s completely normal.

You cannot grow and learn without making mistakes along the way, which is why they are an important part of your financial journey. So if you’re beating yourself up about mistakes in the past, understand that those mistakes are what have brought you to this point today.

If you’re afraid to make mistakes in the future, understand that they will happen – it’s par for the course. Your financial journey will not be linear, and you will likely encounter hardships along the way.

Acknowledging and accepting this ensures that you aren’t too hard on yourself when it happens. You’ll be able to accept it for what it is and quickly move on to getting out of your predicament and learning from your mistake.

Talk to someone

Money is often seen as a taboo subject, even amongst close friends and family members. But changing your attitude towards it means addressing these topics openly.

For instance, if you’re carrying debt and are struggling to keep up with payments, it’s easy to bury your head in the sand and hope it goes away. But that doesn’t help anyone.

Instead, speaking to a professional that can give you legal advice will help you relieve your stress over the situation. You may also leave that conversation with new insights and solutions to overcome your overall financial struggles.

Associate with positive-minded people

Finding people with a positive outlook on money can be challenging, but it’s not impossible. Talk to friends and loved ones who share that outlook.

Suppose you don’t have much luck in real life. In that case, you can access online forums and Facebook groups with like-minded people who can support you on your financial journey. You can also curate the information you consume by following your favourite financial guru on your social media platforms.

Another important thing is to block out negative attitudes for some time. This won’t be easy, particularly if they are close friends and family members. Still, it may help to limit your time with them – particularly as you transition to a more positive outlook.

Final thoughts

There you have it, 11 tips to develop a healthy attitude towards money. The process won’t be easy and it will take time, but taking steps such as building an emergency fund, reading books on money, and associating with positive-minded people will slowly change your relationship with money.

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