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How to Shift Your Financial Mindset for the Better

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Our financial health often plays a big part in our mental well-being. Sixty-four percent of Americans say that money is a significant source of stress, according to a 2020 survey conducted by the American Psychological Association. What’s more, over half have experienced negative financial impacts from the pandemic. 

Changing your financial habits (and, in turn, your reality) requires a shift in mindset. It’s about integrating healthier thoughts and beliefs that ultimately change your behavior for the better. Here are four ways to shift your financial mindset.

In this Article

Identify where you’re financially stuck.

It’s hard to make movement in the right direction if you don’t know where you’re going. Changing your mindset begins with assessing your financial health. The Consumer Financial Protection Bureau provides a free financial well-being questionnaire that’s designed to do just that. It asks targeted questions that paint a picture of your current financial reality. This includes your ability to: 

  • Manage your income and expenses
  • Handle a major unexpected expense
  • Achieve your financial goals
  • Live with financial confidence

Now let’s go one level deeper. Pondering the questions below can help you identify negative thought patterns that are likely holding you back. These are toxic ways of thinking that can quietly impact your financial behavior. You may not even be conscious of them.

  • In which areas of your financial life do you feel disempowered?
  • In what ways are you financially stressed out?
  • What are some limiting beliefs you have around money? This can include thoughts like:
    • “There never seems to be enough money to go around.”
    • “I’ll never get out of debt.”
    • “I’m not smart enough to financially thrive.”

Pinpoint how these things make you feel.

After taking your financial temperature, it’s easy to get swallowed up in feelings of inadequacy or despair. Dwelling on these emotions won’t do you any good — but acknowledging them in a healthy way can actually be helpful. Instead of denying these feelings, treat them as opportunities to transform your financial life.


Don’t think emotions matter that much? One 2013 study suggests that financial anxiety has a negative effect on both mental reasoning and cognition. It stands to reason that there’s a real link between financial disempowerment and financial insecurity. To put it another way: our thoughts and beliefs create our feelings, which inform our behaviors and shape our reality. 

 Perhaps the best way to break this cycle is to go right to the source. Reimagining your thoughts and beliefs around money could have the potential to change your reality. It’s little wonder there’s been such a spike in financial therapy. This branch of psychology focuses on our feelings and emotions to improve financial health. 


Make an action plan that reinforces positive feelings around money.

It may sound simple enough — just change your thoughts and feelings around money and you’ll be golden. Unfortunately, that can be much easier said than done. Our financial mindsets are shaped by all kinds of things. If you grew up in a household that lived paycheck to paycheck, or remember watching your parents struggle with money, those same feelings of scarcity and lack may run deep.

 Your own financial traumas can be equally powerful. Maybe you experienced a divorce that threatened your sense of financial security, or accumulated debt after losing a job. Experiences like these tend to loom large in the back of our minds. When this happens, fear can step in and impair our financial decision-making.

 Creating new, positive experiences around money can help you write a new story. Budgeting is at the core of financial wellness. Adopting a method like the 50/30/20 rule is a simple way to take control of your income and expenses. It’s easier to break the debt cycle and build up your savings account when you’re living within your means. It goes hand in hand with identifying and achieving your financial goals. When these healthy new patterns are in motion, you’ll likely feel a decrease in financial stress — which can set the stage for a new money mindset.

 Practice financial mindfulness.

Financial mindfulness is a movement that’s picking up a lot of steam, and with good reason. It can help reduce anxiety, rein in overspending, and improve financial success. In practice, financial mindfulness asks us to stay grounded in the present moment, rather than catastrophize about all the financial disasters that could come our way in the future. When you mess up, and most of us do, be gentle with yourself. Learn from your mistakes, take a deep breath, and begin again. Revisit your budget and ask yourself if any tweaks need to be made. Prioritizing your emergency fund can help you sleep better because you’ll know you can handle an unexpected expense if life throws you a curveball.

Adopting a new money mindset doesn’t usually happen overnight. What matters most is creating financial awareness, which can help us make more conscious decisions around money. DailyPay is all about making that journey a little easier.

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