Reshaping your money mindset

Written by Glen James

Host of the Retire Right & money money money (formerly my millennial money) podcasts & author of The Quick-Start Guide to Investing.

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Here’s a question for you: did your family discuss money when you were growing up? Was money seen in a positive or negative light?

The way money was perceived in your early years shapes what’s known as your ‘money mindset.’ This mindset is essentially the set of beliefs you carry about money, influenced by what you observed and experienced as a child. Whether you saw your parents managing finances with ease or struggling to make ends meet, these early experiences impact how you handle money as an adult.

Consider this: did you inherit any negative financial beliefs or trauma from your upbringing? For example, if money was always tight in your family, you might find it challenging to spend money as an adult, fearing it will disappear and leave you in a precarious situation.

As we move through life, these money beliefs often become more ingrained. When finances are tight, the sense of scarcity can make us overly cautious, while having an abundance might lead to careless spending without structure. These attitudes don’t simply fade away; they can influence how we manage our finances well into retirement.

You might struggle with using your hard-earned superannuation funds, torn between the fear of depleting your savings and the temptation to spend freely without limits. Take this chance to reflect on how the money beliefs from your past are shaping your approach to retirement finances now. Here are 3 exercises that can help you shape your money mindset the way you want it to be so you can enjoy your retirement years:

#1 take a moment to think back

Write down your earliest memories with money. Think of what you saw, the opinions that were expressed, and how you felt as a child.

#2 get to know your money mindset​

​Create a list of your current money beliefs and attitudes. For each belief, ask yourself if it is based on your personal experiences or inherited from others. Rate each belief on a scale from 1 to 10 in terms of how positive or negative it is.

Here are some examples of beliefs you may carry about money:

1. Money is scarce – A belief rooted in growing up in a financially strained environment, leading to a mindset that money is hard to come by.

2. Money is freedom – Seeing wealth as a way to unlock choices, experiences, and independence in life.

3. Money is security – A belief that having a financial cushion is essential for feeling safe and protected from life's uncertainties.

4. Money is the root of all evil – A negative attitude often formed by witnessing greed or corruption, leading to the belief that wealth leads to moral compromise.

5. You have to work hard for every dollar – Rooted in a strong work ethic, this attitude may cause someone to undervalue the role of investing or passive income.

6. Money doesn’t grow on trees – Often a lesson learned in childhood that can instil a sense of caution, frugality, or fear of overspending.

7. ‘I’m not good with money’ – A limiting belief that can stem from past financial mistakes or a lack of financial education, leading to avoidance or anxiety around managing finances.

8. You need money to make money – The idea that without an initial wealth base, financial growth is difficult, which can deter people from seeking opportunities.

9. Saving is for the future, spending is for now – A live-for-today mentality, where immediate gratification takes precedence over long-term financial planning.

10. Money equals status or success – The belief that financial wealth is the ultimate measure of achievement, often driving a pursuit of material success over personal fulfilment.

#3 reimagine your financial future​

​Spend 10-15 minutes visualising your future self. Imagine your ideal lifestyle and how you would feel about managing your money. What would a balanced approach to spending and saving look like for you? Write down specific actions or changes you could make now to align with this vision.

Here are some examples of how you might choose to reshape and rephrase your beliefs around money:

1. Money is a tool, not a goal – Seeing money as a means to create opportunities, not the end objective, can reduce stress and pressure around finances.

2. There’s always more to learn about money – Viewing financial education as ongoing empowers growth and improvement, regardless of past mistakes.

3. Abundance is possible – Shifting from scarcity thinking to believing there are enough opportunities for financial growth can open up new paths.

4. Small changes make a big difference – Understanding that even small adjustments in spending, saving, or investing can significantly impact long-term financial health.

5. Money can work for me – Believing that through smart investing and passive income, money can grow without constant effort.

6. It’s never too late to improve my financial situation – Adopting the mindset that progress can be made at any stage of life alleviates feelings of regret or missed opportunities.

7. I can make decisions based on my values, not fear – Recognising that financial choices can reflect personal values, not just fear of loss or failure.

8. Money doesn’t define my worth – Detaching self-worth from financial status helps cultivate a healthier relationship with money.

9. I have control over my financial future – Believing that proactive planning and smart decisions can lead to financial security, even if external circumstances are unpredictable.

10. I can recover from financial setbacks – Embracing the idea that financial missteps are learning experiences, not permanent failures, promotes resilience and confidence.

These exercises might sound simple, but they might bring up some fairly heavy memories and feelings—that’s okay! Now that you’ve worked through them, I want you to build some lightness and positivity into your money mindset. You can change the way you think and feel about money. Don’t spend the next few years feeling weighed down, when you can embrace a mindset that empowers and uplifts you. By actively reshaping your financial beliefs, you create space for greater financial freedom and joy in your life. Remember, a positive money mindset is within your reach and can lead to more fulfilling and balanced financial experiences.