Page 6 - Advice Matters Magazine - FWP - Dec 24

Is your money mindset holding

you back?

Does your Money Mindset have your back? Or… views market fluctuations as learning experiences and
Is it holding you back? opportunities for growth.
If you’ve never really thought about it, you’d be forgiven. When • Scarcity and Fixed Mindset:
it comes to our financial success, we tend to focus on things like Jacob believes he will never be good with money and that
income, investments, and expenses. It makes sense to put our financial success is reserved for others. He avoids investing
financial position down to how much we earn or spend, or the due to fear of losing money and prefers to keep his savings
performance of our investments. But what about the role of our in a low-interest account. He often feels stressed about his
Money Mindset? financial future and is reluctant to seek advice.

What is a Money Mindset? • Abundance and Fixed Mindset:
Taylor is optimistic about her financial future and believes
A money mindset is your set of beliefs and attitudes about
money. It shapes how you make financial decisions, how you in plenty of opportunities. However, she thinks her financial
perceive wealth, and how you react to financial challenges. skills are unchangeable. She sticks to familiar, low-risk
Understanding your money mindset is important because it can investments and dismisses new strategies, missing out on
either support you in achieving financial success, or hold you potentially higher returns.
back from it. • Scarcity and Growth Mindset:
Oscar grew up believing money is scarce and financial security
There are various types of money mindsets, but they often fall
into two broad categories: is hard to achieve. Despite this, he commits to improving his
financial situation through education. He starts with low-risk
Abundance Mindset vs. Scarcity Mindset investments to build confidence and gradually diversifies his
Abundance Mindset: An abundance mindset is the belief that portfolio, overcoming his fears over time.
ample opportunities exist to earn, grow, and enjoy wealth. Strategies to shift a negative Money Mindset
People with this mindset see the world as full of potential and
possibilities. They tend to be optimistic about their financial If you’ve identified that your money mindset might be holding
future and are willing to take calculated risks. you back, don’t worry! The following strategies can be used to
help you to shift your mindset to a more positive one:
Scarcity Mindset: A scarcity mindset, on the other hand, is the
belief that resources are limited and difficult to obtain. People 1. Set Realistic and Achievable Financial Goals - Start with small,
with this mindset often focus on what they lack rather than manageable goals and gradually increase their complexity.
what they have. This can lead to fear, anxiety, and a reluctance Achieving these goals will build confidence and encourage a
to take risks. positive mindset.
2. Educate Yourself on Financial Management and Investing -
Fixed Mindset vs. Growth Mindset
Understanding financial principles and investment strategies
Fixed Mindset: A fixed mindset in a financial context means can reduce fear and build a sense of control over your
believing that your financial abilities and knowledge are static finances.
and unchangeable. People with a fixed mindset might think they 3. Practice Mindfulness and Emotional Intelligence -
are either “good” or “bad” with money and that this cannot be Mindfulness can help you stay present and make thoughtful
altered.
financial decisions. Emotional intelligence will enable you to
Growth Mindset: A growth mindset is the belief that financial manage financial stress and maintain a positive outlook.
skills and knowledge can be developed through effort and 4. Seek Advice - Professional financial planners can provide
learning. Individuals with a growth mindset see financial valuable insights and strategies tailored to your unique
challenges as opportunities to improve and grow.
situation. They can help you navigate complex financial
Money Mindsets in Everyday Life decisions and create a roadmap for achieving your goals.
Having explored the concepts of abundance vs. scarcity and fixed Your money mindset plays a crucial role in your financial
vs. growth mindsets, let’s look at how these money mindsets success… it should have your back, not hold you back!
might manifest in everyday life: By identifying and overcoming negative financial beliefs, you
• Abundance and Growth Mindset: can create a healthier relationship with money and achieve your
Kylie believes there are many ways to grow her wealth. financial goals. Take the first step today by reflecting on your
She takes an online investing course, consults a financial financial mindset and seeking professional advice to guide you
adviser, and starts a diversified investment portfolio. She on your journey.

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DECEMBER 2024