People pick up money habits from friends, parents, and colleagues. The key to mastering your finances is reforming your habits. Do this by changing your money mindset.
Everybody has money stories. From thrifty parents to indulgent friends, we absorb how we see others treat money. Those beliefs affect us in every way, from how we dress to what we put in our grocery carts. And for independents, our money mindset can make or break our businesses.
Unfortunately, most people enter adulthood with an unhealthy money mindset. Without intentional reflection on how we view money, poor financial habits can make it nearly impossible to create a meaningful life of abundance.
For independent business owners, a toxic money mindset can manifest as a need to discount pricing or apologize for how much we make. Or it can look like a dismissive attitude towards your financial picture. It may look like never being sure how much is in the bank at any given time. But financial anxiety goes even deeper than surface-level symptoms, creating feelings of lack, scarcity, and imposter syndrome that can make you question your self-worth at a core level.
While you can’t go back in time to change your inherited mindset, you can consciously reprogram the way you behave with money today. The result is that you will feel confident in your pricing, investments, and financial management.
Follow these steps to adjust your money mindset and fall in love with your numbers (finally).
- Examine your spending habits
- Tune into your self-talk
- Check your accounts daily
- Be intentional
- Talk about money
- Change your money mindset with pricing updates
Examine your spending habits
If you have an unhealthy relationship with money, the first thing to do is examine where your money goes. How and why do you spend it? Are you rushing off to your favorite store the day your paycheck hits your account? Or do you head straight to the clearance rack every time you go shopping?
Believe it or not, how you spend money influences how you earn money. For instance, if you only shop the sales, why should you expect others to pay your full price? If you are quick to splurge on frivolous items, when do you get to reinvest in your business’s future?
That’s the power of mindset. If you think that money is a scarce commodity, it can convince you that people will only value your offerings if they are “on sale.” However, these thoughts are only true if you believe them. So before you break a sweat over your business’s pricing, spend some time evaluating how you spend money and what those habits subconsciously say about what you think you deserve.
Tune into your self-talk
A big part of our mindset is how we talk to ourselves about money — and how we talk about money is how we act with money. It is common to hear people say, “Oh, I’m just not good with money,” or “money does not come easily.” Remember that these thoughts are rooted in money stories given to you by somebody else. You do not have to adopt them in your own life!
Self-talk, whether positive or negative, dictates the way we feel and behave daily. Fortunately, it is something you can start addressing today! You can only deal with the money you have right now. Earning more money doesn’t make you better at managing it, so listen to what you tell yourself and start changing the narrative.
Check your accounts daily
If the thought of checking your bank account makes you uneasy, it’s time to face the pressure head-on. There is no pretending your negative balance will go away. Sound financial health starts and ends with knowledge, so confront the discomfort and get familiar with your numbers.
You cannot change how you feel about money if you are unaware of how much you have. Otherwise, you will remain stuck in the cycle of feeling “irresponsible” or “bad” with money. In reality, you are simply uninformed, which will quickly change when you start checking your accounts daily!
If tracking all your money feels like too much at first, start with one account. If that feels like too much, start with only what you spent this week. How much did you spend on things that give you joy? What did you spend on things that contributed to your business? Did you spend money on anything that wasn’t necessary? Build confidence in your money habits by gaining awareness and building from there.
Use a budgeting tool
For many, budgeting sounds like an extra chore on a neverending to-do list. But thanks to modern technology, Saturday mornings don’t need to be spent sifting through receipts and punching numbers into a spreadsheet! There are many budgeting apps for personal use, like Mint, YNAB, and Goodbudget. There are also bookkeeping apps available to simplify money management, like QuickBooks Online, Xero, and Freshbooks.
Many banks have user-friendly budgeting features to help you reach savings goals and track spending. Having your expenditures, write-offs, and income in one place will make your life easier during tax season and give you a foundation for building better habits. The key is finding a system that works for you so that the habit sticks. The easier your system is to stick to, the more likely you’ll follow through. Confidence in money is built from hyper-awareness, so keep tracking—even if it feels like a gut punch!
Apply intention to money management
Without intention, it is easy to go off the rails with spending. Intention makes everything mean more: the vacation, the designer handbag, the upgraded car, and the dream home. There is more value to an investment that comes from the heart. Pay for the things you value; if you don’t value it, do not pay for it!
Sit down and consider what you need to get ahead, whatever that looks like for you. Do you need to build your business emergency savings? Do you need to revamp your marketing strategy with some professional help? Or, maybe you need to streamline your clientflow with an all-in-one platform. Listen to your heart and be realistic about whether your expenses align with your 2023 goals.
Talk about money
Money is one of the most under-discussed topics, but the veil of “privacy” often hides deeper insecurities and financial fears. While this is not to say you should post your annual revenue or monthly expenses on social media, do not shy away from discussing finances with those in your inner circle — particularly those on your team.
Discussing cash flow or spending with your team is less about finances and more about brand values. For example, if you operate a luxury brand, you understand that it is a high-touch, high-cost experience that requires the correct language. From package pricing to client gifts, your numbers look different than those of a budget-tier brand. Your team needs to understand and embrace that difference! While you do not need to hand out profit and loss statements to everyone in your company, transparency can bring them into the culture and demonstrate your brand’s values.
Change your money mindset with pricing
Once you have developed a healthier approach to personal spending and money management, it is time to revisit and update your pricing with a fresh perspective. Some people will pay for your full value, but you have to believe it. The right clients will not flinch at your fully-warranted pricing—and those who think it is “too expensive” simply aren’t the best fit for your business.
Journaling is one powerful (and free!) tool to work through money mindset challenges. Everyone has a pen and paper, so start writing about feelings and concerns that arise. How does it make you feel to think about doubling your pricing? Why? How would you respond if a prospect said you cost “too much”? Facing these difficult questions head-on can uncover the reasons behind your money mindset.
Most importantly, allow yourself time to learn and grow. Money mindset does not change overnight. It takes time to confront and release those deeply-ingrained stories, so give yourself grace as you work through your limiting beliefs. Forgive yourself for past mistakes and commit to a more intentional and financially sound future. You are the only one who can change your story—and you can start right now.