6 Ways to Instill a Positive Money Mindset

Many of us know what we're supposed to do when it comes to basic money management - spend less than you earn, save an emergency fund, and invest for retirement. However, establishing good habits is always easier said than done.

Money management, like many important things in life, requires discipline. And discipline isn't a natural mental state for everydiv. Add to that the guilt and shame that some of us carry when it comes to finances, and you have a recipe for money management misery. Or, at least, a sense of why the "ostrich approach" can seem more appealing than tackling underlying issues.

But, as appealing as it may seem, there is not a single financial guru advocating the ostrich approach as a means to achieving financial fitness! In fact, going that route will only serve up more guilt and shame in the long run.

Fortunately, there are some relatively simple steps you can take to move from negative feelings and lack of discipline to a positive money mindset and great habits.

So, let's go!

1. Forgive Yourself for Your Financial Mistakes

There are likely few people who can claim that they have NEVER missed a credit card or bill payment, never gone on an impromptu over-spending session, and never raided their savings for no good reason. If you are one of those people, you should probably be the next financial guru. For the rest of us, it's time to practice self-forgiveness.

Brittney Castro, Certified Financial Planner and founder of Financially Wise Women, says, "Forgiveness is a powerful tool because it prevents us from being a prisoner to our past. If we shift our focus away from shame we can make room for better practices and a healthier attitude towards money." It's important to acknowledge and accept what has happened. Make your apologies to yourself (and those around you, where necessary) and focus on moving forward.

Please also remember these wise words from Brittney: "Your financial mistakes are not you - your self-worth is independent of your mistakes."

2. Understand Your Money Mindset

While you may think you know your attitude towards money, it's possible that you're not fully aware of how your views are shaping your decision-making.

Brittney Castro suggests tracking the thoughts that come up each time you make a money decision. As we make so many money decisions in our lives, doing this for just one day and then reviewing the results for patterns can be enough to deepen your awareness of your attitudes. With more clarity on your mindset, you can identify beliefs and habits that affect your ability to stick to (or even create) goals and plans.

3. Stop Comparing Yourself to Others

In this age of social media, reality TV, and celebrity magazines, it's far too easy to get sucked into making comparisons. We compare ourselves to other family members, to our friends, to celebrities, and to fictional characters on TV.

This is not a good way to spend your time for several reasons:

  • You're comparing what you know about yourself (i.e., everything - "warts and all!") to what you see of someone else (i.e., their best side that they choose to show you).
  • Furthermore, you don't know the intimate details of the other person's finances. Someone may appear to have a fantastic life filled with fabulous clothes, vacations and other fun stuff, but it could be fueled by credit card debt...or worse! If you need a real-life example, check out the Real Housewives of New Jersey. All that glitters is not gold.
  • When you make comparisons and find yourself lacking, you're diverting attention (and, potentially, activity) away from focusing on your own finances and aspirations.

So, create attainable goals for yourself and compare yourself to those. Celebrate the wins and update your goals as you reach them.

4. Create (and Maintain) Good Habits

Once you have some goals and your eye on the prize, it's time to establish the habits that will ensure you meet them. If you've never delved deep into your income and expenses or created a budget, this is a good time to try that. Understanding where you're spending your money will help you determine where you can save more, if that's your goal. This awareness will also help you pick goals that are achievable - even if they're a stretch - so that you can build on your success rather than end up paralyzed by defeat.

One particularly effective habit is committing to a set time - one hour per week - to review your finances and monitor your progress. If one hour seems like a lot, it's worth noting that millionaires spend, on average, 8.4 hours per month managing their money. That works out to about two hours per week. You can use a platform like Mint.com, your bank account app, or a simple spreadsheet - just make sure to review everything.

If you're in a relationship, pick a mutually beneficial time for both of you and ensure you will be fully present for the duration of the conversation. Granted, money discussions aren't always smooth sailing for couples, and arguments can ensue. However, pushing through the discomfort can be the difference between staying together or splitting up for some couples.

Even if you decide that one of you is going to be the primary money manager, personal finance expert Farnoosh Torabi recommends, "Make sure to get on the same financial page and agree to goals so that there's no miscommunication. Once you both have a clear picture of the finances, figure out together how you want to delegate money."

5. Optimize Your Budget for Happiness

The very word "budget" can fill people with dread because it brings to mind restrictions.

Manisha Thakor has a more positive outlook, as she believes, "Gentle boundaries can set you free." This is because knowing where you're spending your money - as opposed to having no idea where it's going - is a far more empowered place to be.

That awareness ensures that you can tweak your spending so that you're directing your hard earned cash towards what matters to you most. As Ashley Feinstein, founder of "Knowing Your Worth," states, "Sometimes we spend on things that don't actually make us happy just because we think we should. How much of what you're spending is for you and your goals?...What are you spending on that truly brings you joy?"

A great guideline for budgeting is the 50/30/20 rule. This comprises directing 50% of your earnings to needs (housing, food, gas, medicines), 30% to wants (vacations, that painting class you've always wanted to take), and 20% to saving. If you're carrying debt, that 20% may be directed to paying that off first. If you keep the 30% and 20% separate from the 50%, you're probably going to be OK without having to review everything on an itemized basis every month. Plus, you can go wild with that 30% and spend it on whatever you want!

6. Practice Gratitude

Last but not least, daily affirmations and gratitude for what you do have can be really powerful.

GoGirl Finance contributor Kali Hawlk suggests keeping a journal: "Start by writing down one thing every day for which you are grateful (financially and personally). Return to your gratitude journal any time you feel overwhelmed or negative about your own finances (or any situation in life)."

The simplest practices can make all the difference.

This post was written by Rebecca Jackson of GoGirl Finance. GoGirl Finance is a fast-growing community of women seeking and providing financial wisdom across money management, lifestyle, family and career. For more finance tips, follow GoGirl Finance on Twitter @GoGirlFinance.