How to Change Your Attitude Towards Money

How to Change Your Attitude Towards Money: I have been writing this post in my head for some time. I am really curious about the attitudes people develop about money. Specifically, I’m referencing speaking about topics like debt, investing, interest rates, money management, etc.

The reason I bring this is up is in my experience, most people tend to fall into one of two camps: the willfully ignorant and the curious learners.

How many times has a money-related conversation come up in a group, and one of the group members tries to quickly shut it down? Such as: “Oh, we don’t about those kinds of things”. Well, why not?

Below, let’s bring up some key points on unhealthy money attitudes:

Examples of unhealthy money attitudes

How to Change Your Attitude Towards Money

  1. Being stressed about finances
  2. Not knowing how to manage money effectively
  3. Being incapable of saving money
  4. Avoiding talking about money for fear of conflict or embarrassment.
  5. Entitling yourself to rewards even though you can’t afford them.
  6. Resenting people who have too much/too little money
  7. Thinking more money will solve your problems

Let’s discuss some of these points down below, along with ways to solve some of these problems.

1. Being stressed about finances

Stress is a pretty serious issue as it linked to many potential health problems (e.g. heart disease). Understanding the trigger points for your financial stressors is important. Whether it is an issue with revolving debt or poor budgeting, identifying the issue is the first step to solving it. If you want to check out a great article on this topic, try this one: How to cope with financial stress.

Here are the main steps to consider:

  • Leave the feeling of shame/fear of failure behind you. It’s time to move on.
  • Focus on what you can change, solve, or fix.
  • Don’t compare yourself to others. This is only about you.
  • Educate yourself by listening to finance podcast/commentary or reading about money management.
  • Ask for advice from knowledgeable advisers such as financial planners, accountants, etc.

2. Not knowing how to manage money effectively

Learning how to budget takes time and effort, but the work is well worth it. Budgeting lets you know where you stand financially. It also gives you real targets for improving your finances. You can’t improve if you don’t understand where you’ve started from.

If starting a budget is a goal of yours, I recommend getting an app like Personal Capital or Mint. Both apps are great and completely safe to use. I have been using both for about four years myself.

If you’re more old-school or just like the simplicity of paper, I recommend getting a budget book. A few months ago, Wealthlenial did a review: Best Fun and Novel Financial Budget Planner – My Top 6. In this, we reviewed some interesting and affordable budget planners to get yourself started on the road towards financial stability!

3. Being incapable of saving money

This seems to be a problem for many people. According to this CNBC article:

  • A study by a team of neuroscientists at Cornell University found that people would much rather earn money than save it.
  • About 55 million people have nothing saved for an emergency.

In American society, there seems to be a large focus on earning and optimizing your employment so you can make more money. What is often ignored is ways to save.

If you’re one of the many finding that the second they get their paycheck, it’s almost all spent – don’t feel bad. According to this study from Cornell, that is the average response. Interestingly enough, the study also states that the impulse to spend is actually a learned behavior. It’s no surprise given that American culture is so consumer-driven. We learn from an early age that in order to be happier, we need to spend our money.

It may seem hopeless; however, learned behaviors can be adjusted. Saving and budgeting can be taught as well, and ideally, if you’re a parent/guardian, start this with your own child/children at an early age. It’s time to teach the next generation how to have a healthy attitude towards money by being good role-models ourselves.

4. Avoiding talking about money for fear of conflict or embarrassment.

Discussion is education

Discussing a topic is a natural way to learn about it. Shutting down the dialogue is a good way to stagnate and maintain your core beliefs. Statements like, “It’s not polite to talk about money” only produce a stigma around openly talking about finances. There are two reasons I believe people tend to do this:

1. Fear of feeling stupid

2.) Having someone show them the error of their ways.

So in essence, people shut it down to preserve their egos.

Fear has this tendency to shut the brain down. When you are afraid, the focus turns from understanding what you’re afraid of to finding ways to avoid it. If someone is afraid of money, be it: talking about it, losing it, spending it or making it – there is a problem.

Here is a good example: couples often fight about money, but the question is why. Is one partner a saver while the other is a spender? Are there two spenders in the house? Is there an open and honest dialogue between partners about how to manage their money effectively? In many cases, there is little constructive and open discussion around finances. It is largely driven by emotions vs. logic. This leads to conflict within the relationship which produces strain in the household.

So, let’s keep something in mind. If those around us are willing to teach us ways that we can improve in a constructive and positive way, why wouldn’t you use this knowledge? The one thing that gets rid of fear is education. Financial education is one of the most important things you can do for yourself. Understanding money and how it works yields continual advantages in life – in more areas than I could list here.

In one of my early posts, I talk briefly about five of the books I have used to improve my knowledge on money. If you’re interested in that post, you can read it here: Best Financial Books for Beginners: Get Educated!

5. Entitling yourself to rewards even when you can’t afford them.

While it is perfectly healthy to treat yourself to an occasional reward, it isn’t healthy if you can’t afford it. This falls into the umbrella of “living beyond your means” and what some people call “retail therapy”. Living beyond your means is a common path where people end up getting into debt, causing finance-related stress (see point 1). ”

Retail therapy” serves the same function as comfort food and is just as unhealthy. You may feel great at the moment, but afterwards, you realize that you just bought a bunch of junk that you didn’t need. This is the danger of “retail therapy” in extreme forms.

6. Resenting people who have too much/too little money

This is an interesting topic to me. In a society obsessed with wealth and materialism, some people think the high road is to disdain those who have money. Being obsessed with money is very unhealthy. However, resenting someone you have never met simply because they have more resources than you is just petty. Money is a tool and nothing more. Money amplifies the type of person that you are. If someone was terrible person before coming into money, nothing really would be different.

Never assume you know a person simply because they have more than you.

On the flip side of the coin, having money doesn’t make someone better than anyone else. Money is a tool. It’s a resource, a medium of exchange. That’s it. You cannot assume that someone with less money did something wrong. Perhaps, they have medical bills. Maybe, they’re caring for a loved one who is ill.

Resentment does nothing but make you crazy and miserable.

7. Thinking more money will solve your problems

Unfortunately this seems to be a popular belief with people with poor money management and/or financial education. More money will most likely not solve money problems. If anything, it tends to add to them. Why? Lifestyle inflation.

Did you ever notice when someone gets a higher paying job or a promotion, they tend to get a new expensive item? Something like a new car or new purse. This reminds me of point #5 except that with this new job, these people think they can afford the new status item.

While they may be able to afford the payments, all their hard work has been wasted. In our example, they’ve traded their old car for a fancy new one with a higher payment – completely negating the raise or promotion. They’re in the same spot financially, except this time,they’re attached to an even more aggressively depreciating asset.

Healthy Money Attitudes

how to change your attitude towards money

  1. Money is just a tool
  2. Wait until you can afford it / avoid impulse purchases
  3. Discuss money – Learning happens through discussion
  4. Create a healthy balance

1. Money is just a tool

Money is nothing more than a resource. It can do whatever you want it to do. Do not assign a higher value to it than this.

2. Wait until you can afford it / avoid impulse purchases

Avoiding the impulse to spend money as soon as it’s available takes discipline. However, it is well worth it in the long run. Rather than spending carelessly, being able to save and afford items of greater importance and value would be more rewarding.

3. Discuss money

As stated before, education comes from discussion. Find someone that is knowledgeable that you also trust and pick their brain. See how they think about money. Learn some skills from them.

4. Create a healthy balance

When we say “create a healthy balance”, we’re talking specifically about striking a balance between saving and spending. Hoarding money for money’s sake is not a healthy behavior but neither is spending every dime you have. Enjoy money but also grow it. Try to stay away from extremes.

What is your money attitude?

In this interesting quiz, you can find out what your money attitude is. There are five options: amasser, hoarder, avoider, money monk and spender. Here is the link: Take the Moneyharmony Quiz!

After taking this quiz, I fell strongly towards the amasser type. This was mostly due to my strong focus on investing and saving.

What were your results? Leave a comment and let us know!

Did you like this article? Check out some of our others:

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How to Drive Across the Country for Cheap

How to Cut My Cable Bill – The 8 Step Guide.

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One thought on “How to Change Your Attitude Towards Money

  1. Attitude towards money goes a long way in determining financial stability. Little wonder why there’s a thin divide between the rich and the poor. There are some attitudes and habits that are formed over time that are detrimental to accruing of wealth. More reason why you find people who spend all they make on liabilities.

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