Is Wealth Just About Changing Your Mindset?

Money Mindset

Being the personal finance nerds that we are, Johnny and I were reading our latest issue of Money magazine, and it struck up a fun discussion. Okay, truthfully, Johnny read it and then told me about it, and then the discussion ensued. In the Editor’s Note section, it says that “The surest path to true wealth … isn’t a particular portfolio or career strategy, … [but] it’s a mind-set that emphasizes responsibility and frugality, shuns excessive risk taking, and imbues you with the confidence to go against the crowd.”

In much more simple, less-boring terms, our financial well-being has very little to do with money. It’s all about our mindsets. Johnny and I love this because it hits at the very core of why we believe so strongly in sticking to a budget.

When we were fresh out of college, living in New York City, we easily could have spent every cent of our paychecks. SO EASILY. What wasn’t easy was not spending every cent. Sometimes we just wanted to be a normal couple who’d go out to a nice, intimate restaurant, grab gelato afterwards, and then take a cab home. Instead, we kept our food spending within a total of $350/month, which meant one takeout meal a week and maybe one inexpensive restaurant a month, if we were super frugal otherwise. We had to go against the crowd in order to spend (or rather NOT spend) this way. Johnny’s coworkers would grab Starbucks in the morning, a nice lunch and another Starbucks at lunch, and then go out for drinks at the end of the day. Going and grabbing a $15 lunch was the normal thing to do, and Johnny bringing a homemade sandwich or going to grab a $1 slice of pizza was not normal. The same went for all other aspects of our lives. If an activity cost money and wasn’t necessary, we more often than not didn’t do it. Our behavior probably looked odd, even cheap from an outsider’s perspective. And I’ll be the first to admit that it was kind of odd. But our mindset was focused on one thing: becoming debt-free.

So how do you go from spending more than you’d like to having a saver’s or a debt slayer’s mindset? In other words, how do you change your brain? Welp, it’s your lucky day because I just happen to be a former spender. Buying stuff with reckless abandon makes me happy. Or it used to before my mindset changed. For me, the shift happened when we started making long-term goals. Rather than focusing on how much we could save each week or each month, Johnny and I planned what we could save (or pay off in debt) over the course of a year. That was super motivating for me. And all it took was making small, consistent changes in our spending from day to day. Imagining where we’d be if we gave into extra spending (i.e., in the same place and still in debt) was also very motivating. That’s not to say we didn’t have hiccups along the way. But because our mindset had changed, we always got back on track. And even though we’re debt-free and in a place of financial security right now, our mindset still hasn’t changed. That feeling of financial peace and security is super addicting, I tell ya, much more so than any satisfaction I used to get from buying new throw pillows (no offense, my lovely, soft, patterned squares of fluff).

And it’s all done by — you guessed it — making and sticking to a budget. At least that’s how we feel. Do you agree? Do you think the path to wealth (or at least financial peace) is more about a mindset than a financial portfolio or career path (i.e., more $$$$)? Or do they have it all wrong? We’d love to hear your two cents!

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  • Reply Ashli @ The Million Dollar Mama August 24, 2016 at 9:30 am

    I absolutely agree with this! When my husband first joined the military at age 19, he received a fairly sizeable sign-on bonus. He immediately put it in a CD (which actually made some money back then!), and didn’t spend a cent, while the majority of his peers spent theirs on frivolous things. Now, 13 years later, we still have that same mindset.

  • Reply ginger August 24, 2016 at 1:16 pm

    The hard part for me is sticking to it. I make goals and get really excited, stick with a budget for a few months and then GO ABSOLUTELY CRAZY because I’m tired of sacrificing, then I stick my head in the sand!

  • Reply Frances Berry Marcel August 25, 2016 at 5:23 pm

    It can be oddly isolating. We have not perfected this mind set but are moving toward that goal. Any money spent has to an investment of some sort for us. And others do seem to wonder about the lack of obvious spending. Our 8-year-old daughter and friend were talking this over and trying to make sense of our lack of travel, new cars, or whatever. After much discussion, they came to the conclusion that we must be “almost poor”. Got a good laugh out of that.

  • Reply Taylor August 29, 2016 at 1:08 pm

    It depends on what you’re calling “wealth.” Debt-free, financial security, reaching higher and higher goals … all amazing. My husband and I have lived this way by following a budget for our entire marriage. But it’s unfair to say this technique works for everyone. Yes, budgets are crucial. Yes, debt is bad. But if you have a pretty low income and (especially) no family support or inheritance, even making ends meet is a challenge. I love being frugal and owning my money vs. it owning me. But I recognize I’d never be where I am today without significant help from our families. And I’m not talking about any regular income or allowance, but help with college and cars and nice, useful gifts for holidays and birthdays.

  • Reply Dylan August 29, 2016 at 6:43 pm

    I agree wholeheartedly that it’s a mindset. I have been witness to a concrete and sad example of the choices we make and the result. My sister and I were raised with the same money rules and values.

    When people ask why I don’t have Starbucks every morning, I tell them – “I choose not to spend my money that way.” It’s not that I can’t afford it. If I sacrificed in other areas, I probably could. I just choose differently. Once a month, I choose to treat myself to a meal out (usually sushi) and also give myself a ‘fun line’ on my budget every month. This works for me, as my spending is controlled, I meet all my savings goals, and I never feel deprived. I’m happy.

    My sister decided to ignore the lifestyle of mindful spending that our parents demonstrated, and instead embraced ‘Want. Spend. Have.’ She’s now ten of thousands of dollars in consumer debt. What she spent it on, I have no idea. I’m not sure that she knows. She sees saying ‘no’ to buying something as depriving herself, because everyone else is doing it. Then the credit card bills arrive. Next is a line of credit, and then a personal loan with a horrendous interest rate. And another credit card. It’s a miserable, vicious cycle that I don’t know how she’s going to get out of.

  • Reply ethel September 16, 2016 at 9:38 am

    I am really working on changing my mindset into saving. Me and my husband we could not inherit anything. Yet I want to leave something to inherit for our kids – so my goal is any time soon to buy own appartement and STOP renting. Yet spender-habbits are hard to die. Always when I get paid I forget what my goals where. Again saving and living on budget will go very well more close to i get to the end of the month. I can manage with small money perfectly – I just dont want. Therefore I am working towards generating a side income from little jobs I can do online.

  • Reply Melanie September 19, 2016 at 4:09 pm

    I do believe it’s more about a state of living below your means and contentment rather than a concrete number or salary. If you can afford your bills and what you want in life plus some reasonable treats (dinners out/vacations, new clothes when you need them) then that sounds like wealth to me. But the concept of wealth varies greatly among individuals so it’s a tough topic!

  • Reply Christy October 14, 2016 at 4:36 pm

    Totally agree too- we aren’t rich, but in our mid 40s we are comfortable. And that came more with planning than wealth. Our income has taken a jump in the last 3 years now that my husband has finished his millwright ticket, but it was the foundation we laid when we were poor and I was a Stay-at-home-mom that set up on a course for where we are now. Clearly, like anyone, we could have a massive catastrophe and I might feel differently, but we have planned well and are less than 2 years away from no mortgage. I seriously can’t wait.

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