18 Sep Why Money Mindset Matters
I’ve spoken on the matter of money, by accident, a number of times now. It was never something I felt I was qualified or experienced enough to talk about. I’m not a financial advisor, and I don’t have any formal academic qualifications in money, but I have become increasingly sure that it is something we need to talk about more. Money matters, we all know it, but for reasons unknown in many cases we avoid it like the plague. As women, we have a particularly complex relationship with our own Money Mindset.
Whats Money Mindset?
We tend to sped a lot of time thinking about the actual money; how much we have (or don’t!). But money mindset looks at it a little differently, in particular how we think about money. So do we think theres never enough? Or that rich people are assholes? That we’re very bad with money? Basically the feelings we have around the actual money.
Money Mindset Matters
There are endless reasons why money matters, but today I am going to talk about the three that I think we can all relate to. Then I’m going to give you two solid ways that you can begin to start changing your money mindset!
The really unusual thing about money is its in EVERYTHING we do, so if we get an unhealthy attitude to money it can effect our lives in many ways. These are the three main ones I see.
1. Money makes you happy
Thats not 100% accurate. In psychology, money doesn’t make you happy, but financial security does. Psychologically you will be happier if you earn less and know how and where you are spending it, than if you earn more but don’t feel like you have any control over your money. Money isn’t the issue, but financial independence is. A little like the chicken and the egg, you can’t have that financial security without money.
Equally, while studies show buying things won’t make you happier, studies also show experiences (that cost money)do. So a new handbag won’t necessarily do it for you, but a weekend away in a country cottage with your girlfriends will totally rejuvenate you.
In the context of financial independence, money matters so much that in a study they found that financial insecurity causes the same feelings as physical torture in our brain.
While money may not make you happy, financial insecurity will mess with your brain. And the studies show its now how much money you have, but its your attitude, or your money mindset that matters.
2. Money will help your career
Another key indicator for me that something was wrong with women and money was when I was career coaching extremely driven, capable and amazing women who just froze when I brought up money. I’d hear things like:
- ‘Money is not my zone of genius’
- ‘I stay away from the money side of it’
- ‘I’m really bad with money’
And my favourite…
- ‘Money doesn’t matter to me in a job’
I get it. You may be a teacher or an engineer, a PR person, something completely separate from money right? Wrong.
If you intend on getting anywhere in your career you NEED to know about money. If you ever want to get to any sort of management role or beyond you need to be able to deal with the financial situations that come with those roles. You don’t need to do the accounts yourself, but you need to understand the basics, the relevant paperwork, the return on investment of your projects, the cost per hour of your team, and how to make an informed financial decision.
If you were being interviewed in front of a panel for a fantastic new position and they asked how you would feel with the financial elements of the role, can you imagine answering with any of the answers above? And if you did how do you think the interview would go?
Good financial understanding is key to a solid career progression plan. And your personal money mindset will likely match your professional approach, so a healthy money mindset is key.
3. Money will help you care for those you love
Almost every woman I meet has someone that they are caring for, or care about. In many cases its children or partners, sometimes its elderly parents or siblings with additional needs. Sometimes these situations are very serious and involve and illness or medical difficulty. In some cases its more financial or emotional support for people who need us.
Regardless of the situation, money will help.
While I fully accept that you can’t buy love it can certainly help smooth the way. By the time my child is 18, at the rate of inflation it will cost €10,000 per annum for her to attend college. So for a 4 year degree she will need €40,000, and that doesn’t allow for any living expenses. If an elderly parent needs access to a care home, the cost of the home will make a significant difference in the care they will receive. If someone is ill in your family, having a nest egg to pay for treatment will really make a difference.
Less dramatically, a good savings plan will help you take extra time off over a maternity break, if you choose to take some extra time with your new snuggler. Or keep the housekeeping afloat if your significant other decides they want to start a new business of their dreams.
It doesn’t matter what the reason, having some money will always make bad times easier. So why do we hate it?!
Ok I get it, give me all the money!
Thats another issue and not for today. I’ll talk more about money in coming blogs but I just wanted to take a minute to talk about the good things money does. And to touch on the fact that its not the amount of money that we have, but the Money Mindset that really makes the difference. A lot of women I meet have a really negative attitude to money, but the fact of the matter is Money puts food on our tables, clothes on our backs and Netflix on our TVs.
But more importantly, without getting into the details of it, a good approach and mindset to money is far more healthy than thinking that money is in some way, out to get you!
How do we change things?
I have two simple ways to get started in shifting your relationship with money
Catch yourself if you say anything negative about money.
So if you find yourself going
‘I can’t afford that’.
‘Stupid Taxman’, or
‘I’m really bad with money’, just check yourself and stop
The next time you hear someone say something about money you don’t understand, ask them to explain.
Dude at the bank: Yeah its a really good deal typical APR is 17%
You: What does APR stand for and what does it mean?
Dude at the bank: I’m glad you asked that because I work at the bank and its my job to answer your questions so APR is…
If you’re too nervous to ask, write down the term in your phone. Then you can just google it when you come home or ask your money person. Everyone has a money person btw its usually a parent but if you don’t have one start looking!
These two simple steps will a) help you understand your own relationship with money and b) it will help demystify it. A lot of the time the key to a healthy attitude to money is simply understanding it better.
So thats it, have a think about the great things you could do with a fresh attitude to money. Then try those two tips to start building a new relationship with the cash-dollars!