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Money mindset

21 ideas to help improve your money mindset and habits

Table of Contents

Along with a solid budgeting plan, saving goals or regularly investing it helps to have the right money mindset in place. This along with good finance habits and systems can get you impressive growth in your financial abilities. 

I've been tweaking, testing and experimenting my entire adult life, and in that time I’ve realised some valuable life lessons that have helped me become better with money and achieve a clearer money mindset. 

In this article, I want to go into detail what some helpful lessons and aspects of personal finance you should consider. These could take your abilities with money to the next level or give you a fresh way to think about how money plays a role in your life.

The ideas I want to share all fit into one of three categories.

  1. Setup helpful systems
  2. Create mart habits 
  3. Improve your money mindset

Great! This is what we’ll cover. Before that though, I want to make sure you are reading this at the right stage of your financial journey. 

The goal in this article is to take your thinking to the next level so you can be better with money. You should already have a good foundation in place. I take you through setting this foundation up in my beginner's guide to personal finance and then how to put together a solid budgeting plan. 

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Setup helpful systems

When I talk about systems, I’m talking about the tools and process I go through to manage money. 

It’s very easy to keep using the things we are used to and comfortable with, but they may not be the right choices for us now. 

Most of these systems are things you can set up once, so are very easy to get going. 

Automate what you can

Send your money to the right places without effort

With banking mostly done online these days, you can automate and schedule so many aspects of your financial life.

Pay bills, transfer money across accounts like saving or spending money and recurring investments are all things I have set up to automatically happen in line with my payday. 

I detail this more in my budgeting guide, but setting up automation for the ‘boring’ things in your life means you can focus on the fun things like spending money on what you love (more to come on that concept later). 

Use banks with good apps and features

Find the right banking partner for your lifestyle

There is more to picking a bank than the interest rate. Reality is the difference between 1.5% and 2.2% probably won't change your life much. 

What can make your life easier though is a bank that has features that compliment your lifestyle.

For me I enjoy using banks with good apps that allow me to check the balance without logging in, fingerprint login, quick transfers using OSKO or PayID and can lock debit cards.

I use ING bank as my primary spending account as they rebate ATM fees at any atm. I’m not interested in walking 4 blocks to save $2.50 just so I can get cash out.

These are the things I look for in a bank, so I can get on and not worry about friction when banking.

Pay yourself a spending allowance

Know exactly what you have to spend

This is a strategy that I started using years ago back when I was in serious credit card debt.

I put in place a system that had me paying myself money to spend.

Every pay day I would send money to a transaction account – around 10-15% of my income.

That money was there to spend, to keep me sane while aggressively paying off debt.

It made no difference to my system what I spent the money on, but when it was gone that was it. I had to wait until I “paid” myself again in the next pay cycle.

This was a crucial hack for me to keep your spending habits honest and consistent.

When you’ve got a limited amount of money to spend you’ll start thinking more about ‘needing’ those  impulsive expenses. 

Treat your finances as a business

Take your money seriously

The aim of our money each month is to make a profit. This system crosses over with out money mindset and way we think about our finances.

We need to have more coming in than going out. Some months are great, some months are lean, but as we are trending up over time, we are achieving our goal. Any profits we make we use that to make us more passive income (shares, savings etc).

It’s a fun way to gamify your budget and see if your household could run as a standalone business. No worries if you have difficulties, we aim to have a good long-term average of profitability (our net worth is going up year on year).

Pay in cash

If you are spending too much, make it more obvious

What's easy? Paying for expensive things with credit, on a plan or a loan.

What’s hard? Counting out notes and paying for expensive things in cash.

The feeling of handing over your hard earned money makes you think, even if you saved up for it and know you definitely want to make the purchase.

Forcing yourself to spend only the cash you have is a handy way to curb spending. Easier said than done, though!

What helps is increasing the steps it takes to buy something. Some things you can do to help this are:

  • Take the card out of the wallet and put somewhere annoying to get
  • Make sure our browsers don’t save card info, or accounts like eBay don’t store payment details.
  • Avoid stores that offer interest only/cheap credit
  • Save the equivalent of your future repayments a few months before you buy (like a car)

Monthly money experiments

Use money to understand what you like and don’t. 

Each month we allocate $100 dollars to doing something we’ve never done before,  have never tried or something we scoff at the cost at.

The point is to spend without need to justify the cost. It could be one thing for 100, something 4 times for $25 or two things for $50. We need to spend that money each month to find out the results.

Some things we have tried recently are –

  • An eye liner, my wife was unsure if it’d suit her
  • 3 month educational subscription box for the kids
  • Extraordinary birthday present for a friend
  • At home workout subscription
  • Take an Uber to work for a week.

The thing about these experiments in that in each time we spend, we learn. We learn what it feels to be that extra bit generous, extra bit luxurious or extra bit convenient.

It’s a fun way to spend and learn about what spending does to you without committing too much. If something during the month really resonates with us, we look to incorporate it into our regular expenses.

Habits are things that you do regularly, whether deliberately. Brushing your teeth is a habit, and so is getting dressed.

Like our everyday life, there are a lot of financial habits that we’ve become accustomed to.

We now pay for things by card or even by tap and go payments.

Some of us spend money on certain things in a certain way – Coffee, food, cards or kids. 

I want to highlight a few challenges to your current habits or suggest new ones that have become effective for me and my family. 

Claim on your insurances

Big or small, it’s worth asking your insurer when things happen. 

Most of us have insurances and many of us do not understand when or how to actually claim. We might think it’s for when we are in dire straits, but there are ways to get benefits from your insurer for what you might think are minor things. 

We’ve claimed on several things all coming from unexpected events–theft, water damage, accidents and injury.

It’s worth having a chat with your insurer to see what you can get covered, especially anything home or contents related.

We insure our camera for when it's out of the house, so when our car got broken into while the camera was in it we had it covered.

You can even come out on top in the event of a claim.

When our tap started leaking and the floorboards started warping, we could get newer and better quality boards put down (all while we stayed in a hotel).

Buy quality things

The poor man pays twice

I keep this motto in my head whenever I’m considering something cheap.

You might look at a pair of shoes, a bike, dinner, an appliance or piece of clothing.

The shoes aren’t comfy, the bike chain breaks, dinner wasn’t that satisfying or the appliance just sucks to use it. But it’s cheaper, so it's a better deal, right?

If it breaks or doesn’t do its job, I will get frustrated at the cheapness and go spend more money to fix the issue or buy a replacement.

If it’s an important purchase and key to your everyday life, go with the quality. It might be double the price, but it will be worth it.

Buy things second hand

Save money but still get the value you wanted

Cars are probably the most popular product we commonly buy and use second hand, but there are plenty more valuable things you can find used (whether it be one time or a few years).

It wasn’t until we became a family with kids we understood the benefit of buying pre loved goods. Kid’s clothing that they grow out of in 2 weeks or tear apart is much more palatable to spend $1-$2 on than $20 – $30.

Next time you want to buy a brand new something – TV, couch, hat, laptop case – have a crack at the Facebook Marketplace, Gumtree, eBay or op shops and see what is available. Anything and everything is available in this day and age.

Challenge the costs

Get in the habit of challenging your regular costs,

Rent, utilities, transport are some of those costs we assume are fixed. But are they?

The insurance industry for example is very competitive so when it's time for those infrequent or annual policies to be paid, spend some time looking around. 

You can do most of this online, or even call your existing providers and see what they can do. Utility companies seem to always change the names or formats of their plans so have a look at their sites to see if a good offer is available. 

Then there are the big time wins – your home loan, rent or car costs. You fix these when you decide on your living situation, but before you make these decisions, consider the costs. Do you need that extra bedroom? Do you even need two cars?

Yep, it will take a big change to your lifestyle, but I’ve found making changes that match how you use things can help save money. 

I’m not saying that you need to review every single one of your costs now and make a change. Get curious about what other options there are available.

Over time, I’ve reduced my banking costs, insurance premiums, grocery costs, phone plans all because I challenge rather than accept what I pay for each.

Review your Net worth

Take a snapshot of your financial status every month.

Your net worth is a calculation of everything you own minus your debts.

You can lay it out in a simple spreadsheet or use the MoneySmart calculator to do this here https://moneysmart.gov.au/managing-debt/net-worth-calculator

Add in the assets you have–bank accounts, savings, shares, superannuation, property.

Then add in any debts you have–credit card, home loan, car loan.

Now you can do a sum of all your assets minus your debts. That is your net worth.

In a month's time come back to the spreadsheet, start a new row with that date and do the same.

Over time, you’ll be able to see how your finances change and evolve. Whether you are heading in the right direction,   paints a transparent reminder of where you are.

Save, don’t spend additional money or income

Consider how you can use irregular income to save first, then spend

Do you ever receive a payment that isn't your regular salary or wage?

Could be a tax return, gifts, rebates, investments are the type we can class as ‘other income’.

You might get this and think great more money for the weekend. If you know that a certain amount is coming, then you have a great opportunity to plan how you’ll use it. 

Might be that you want to use it to pay bills or fix that thing you’ve needed to for a while. That’s fine, if something seems urgent or overdue. 

If you have the ability. treat extra income as money that increases your safety net – your savings account. 

If saving all of it seems a stretch, then you can also split the income up – say 50/50 spending and saving. 

Cancel things you don't use

Aka Stop paying for things you don’t use

Yeah, you’ve probably heard this before, but there are still people who pay for things every month on things they don’t need or use anymore.

I don’t want you to cancel anything that makes you happy or improves your life.

If you watch Netflix everyday, no way should you cut that. It’s part of your lifestyle (unless you don’t want it to be).

That gym membership you use twice a month? Have a think if it’s important.

I used to spend $70+ a month on Adobe Creative Cloud. I originally signed up when it was $50 and over the years it crept up and one day I realised I barely used it anymore. 

While cancelling unused subscriptions is a great move, what you do with that money is equally important. Spend the money in a better way. If you cancel a gym membership, use the money you saved to get fitter/stronger another way.

Update the things you enjoy

Spend horizontally, not vertically

I like this concept of building up horizontal wealth. 

This is the concept of building up more of what you love rather than buying many new things just because you can.

Another way to look at it is: if you were given $1000 and told you needed to spend it (not save), what would you spend it on?

Something you don’t own or something you do but a better or newer version of it?

You might love gardening so you get better tools.

Could be TV so you upgrade to nice speakers. 

Horizontal wealth focusses on you building up your passions so you can be a master. 

If you were focussing on vertical wealth, you would look to accumulate things rather than improve.

The key of this is to spend more on your passions, rather than the things you think you’ll like.

We upgrade our life horizontally (focused spending on our interests) rather than vertically (scattered spending on everything).

Improve your money mindset

I like to consider a money mindset as your attitude towards your finances.

This is a critical ingredient in how you use and earn money. Changing and upgrading the way I think has opened new ways to spend money, save money and consider its importance in my life.

I’m not going to get all holistic or spiritual here, but simply give you a few prompts on things that have become useful to me and are different to how we “normally ” consider the use of money. 

Don’t think you have to pay for things to have a good time.

You can be satisfied with low and no cost things 

Ever felt like you have to spend money to take part? Drinks on a night out, tickets to an event, entry fees, parking costs, food and drink costs might creep into that thing you wanted to do.

It doesn’t have to be that way. It’s possible to have a day out without taking your wallet with you.

Our family enjoys trips to the park, beach, community events, library, workshops and catch ups with friends all without a price tag.

It might take some planning – like finding the right location, prepping food and avoiding crowds – but it can definitely ease the headaches of feeling like every time you leave the house it’ll cost you.

This kind of thinking isn’t saying everything you do must be free, but that you need not feel obligated to spend money to spend your free time.

Sleep on it

Have a sleep before you buy something you don’t normally buy.

It’s amazing what a night's sleep can do to your psyche. The difference between night and day can be, er, night and day. You can lose a poor mood (or gain one), find something irrelevant one day, become priority one the next or you forget why you were thinking the way you were. 

Sometimes I think I’d like a new phone, do a bit of research and go to sleep with it on my mind. Next morning I wake up and it's like, “meh, don’t really need it”.

Sometimes though I have something on my mind for weeks and no matter of sleep will make me change my mind of needing or wanting it. By then I know it's a valid reason to buy and that I’ve thought it through. 

Try one sleep the next time you think or like to buy something. See how your mind sees it the next day or if you regret not buying it. 

Spend big on the things we love

If you love it go for it

It’s something you can easily try. So many people focus on spending light. How about you try to spend heavily on something?

Skip the cheap hotel and book the one you really want, Park your car in the place $5 more for the convenience it offers or buy that main course you’d normally scoff at the price at.  

You don’t need to be frugal with everything. Even if you spend big on 10 or 20% of things then at least you are having some fun with your money.

You don’t need significant wealth to live a rich life

There is no one size fits all rich life

This has been the most prevalent thing I’ve realised since having a family. Rich doesn’t mean wealthy. It means you have the means and plans in place to live the life you want (and what you want isn’t that obtainable as you think).

Have you ever thought of what being rich means to you? No, not the yachts, the mansions, the jets – but what really excites you like family time, holidays, time for relationships.

Rich people don’t all buy boats. There is no common theme to what rich people buy.

Some people spend money on luxury and status, others on health and convenience. Yours is different, mine is different. We are all mostly similar, but there are definitely things I’d want that no one else would want and vice versa.

Write all the things that excite you the most – not necessarily products and gadgets but events and situations that you’d like to be in. 

Most of the time we aren’t far away of living that life, and it might not be money that is the barrier. 

Shopping does not solve emptiness or loneliness

Whoever invented the term “retail therapy”?

Ever felt the urge to get out and buy something to cheer you up?

We occasionally use shopping as a way to fill a need that we are yet to realise.

  • Having a bad day? I’ll buy some fast food.
  • Feeling bored? I’ll buy that pair of pants that could look good on me.
  • Feeling empty? I’ll buy this shiny thing I’ll never use.
  • Feeling jealous? I’ll buy something like what my friend just bought.

It doesn’t work for me and I’m not sure who it works for.

The glossiness always fades away, and you are stuck feeling the same way in the same spot

Don’t worry about the Joneses

Stop comparing yourself to others

Nothing derails your own ambitions than the accomplishments of others.

  • Simon next door has a new car? I suddenly want a new car.
  • Look at these photos of Kate’s holiday she posted. I need to do that. Now.

People cant help but get drawn into other lives – the colour, the uniqueness, the flashiness, the excitement – all because things are happening to people that aren’t you.

It’s a hard one to avoid, but if you have your goals and ambitions in place, these should be the things that excite you more than what family and friends are doing.

If you get caught up in spending to match it with your peers, then look for the negatives (and there should be heaps) – haven’t saved for it, it's not even a place/event I want to go, it’d take months of planning and hours of travel just to take a photo like that.

If you struggle with impulsiveness, then sleep on it.

There’s always another level

Someone will always do it better or in a better position

Do you see yourself as the best at anything? Maths, running, cooking, saving?

I can guarantee there is someone better out there.

It's a hard thought to realise, but it’s highly likely that you aren’t the number 1 at something, or ever will be. But that’s ok. 

It’s discouraging to realise someone is better at you, especially when it’s something you are passionate about.

You have thoughts like “Oh Man, Cam beat my personal best in the half marathon by 3 minutes. I suck”.

No, you don’t suck; you are significantly better than most as you are 1) doing it and 2) pushing yourself to do the best you can.

You’ll always find someone at a different level to you and that’s a good thing.

Where is your money mindset at?

If you have read this far, it’s obvious you are keen to grow your mind, habits and behavior. It takes a bit of deliberate practice to change your set ways. Once you do though, you’ll continue to see things in a unique light and will continue to grow for the better.

Slowly training yourself to get better can build strong pillars to help you make better decisions (including financial ones) and living a rich life.

My take is that when you create a daily life filled with the right habits that fit within your spending or savings plans, it requires so much less work to achieve your goals.

You can wake up and create a new goal tomorrow, but to really get to that goal you need to think in systems. The habits you do or don’t do could hurt your financial position. 

It can only be one minor thing at a time, but if you get better at it each time, you’ll grow phenomenally. 


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