6 ways to start feeling positive about your money

Developing a smarter money mindset can help you get closer to achieving your financial goals. Let’s get started.

You start your lifelong relationship with money as young as seven years old. To ensure it ends up being a healthy and positive one, you’ll need to create some good habits. Here are some essential tips to keep you on track.

1. Figure out where you are now

If you're not keeping track of your daily spending, it's important to start. If you don’t know how much money you have and where it’s going, it can be easy to feel panicked or overwhelmed, especially towards payday.

Make a list of your accounts and transactions using these categories:

• Wealth: all your accounts and the total you hold in each.
• Outgoing monthly payments: rent, mortgage, bills, debts etc.
• Income: money coming in from work, benefits, pension, etc.

 Now you’ll have instant visibility of your income and outgoings alongside your savings. This should give you some clarity and reassurance of how much money you have and how much you need.

2. Set SMART goals for your future

Achieving your financial goals will give your confidence a boost and improve your relationship with money. To improve your chance of success, use the SMART goal-setting method:

• Specific: be clear about what you want to achieve.
• Measurable: make sure you can measure your goal to know how close you are to reaching it.
• Attainable: know the actions you can take to achieve the goal.
• Realistic: be sensible about what you want to achieve so you’re more likely to get there.
• Time-bound: put a deadline on the goal so you’ll consistently work towards achieving it.

3. Get started with budgeting

A budget is simply a saving plan - and one of the best long-term habits you can build. It provides a financial compass giving you clarity, control and direction in your spending. It’s particularly effective when you separate your transactions into three sections:

• Needs: Unavoidable life expenses like groceries, bills, rent or mortgage payments.
• Wants: Leisurely spending like eating out, socialising or entertainment.
• Savings: Any savings or investments you may have.

4. Create a new financial identity

The best way to build and retain new habits is to think of them as part of your identity.

To build a better relationship with your personal finances, try to figure out what identity you’d like to have with two steps:

1. Figure out what kind of person you want to be
2. Prove you’re that person through habits

For example, if you want to be a more positive person overall, nip temptation in the bud and reinforce tough decisions with positive thoughts. Sure, you didn’t buy a new pair of shoes that you really liked, but your savings remain healthy.

5. Build an emergency fund

If you’re not in debt, but you don’t have an emergency fund, it’s time to build one. You don’t know when you’re going to be hit with urgent expenses, like house repairs, or if you lose your job. It’s recommended to have three months’ worth of outgoings set aside for a rainy day.

6. Reframe limiting beliefs

How we feel about money develops in childhood based on our early experiences.

If you have financial goals you want to achieve or want to feel more in control of your money, you need to identify limiting beliefs, like “I’ve never been good with money”, or “I don’t deserve to be wealthy” and create new ones.

You can overcome limiting beliefs by:

• Noticing: Pay attention when you feel yourself resisting an idea. When and why are you saying no to things?
• Questioning: Ask yourself if each limiting belief is helping you achieve your financial goals. What could it cost you physically, financially or emotionally?
• Creating: Now is the time to create new beliefs. For example, if your limiting belief is “I’m bad at saving”, challenge yourself to save a small amount each month. It’s not about the amount, it’s about getting into the habit and proving yourself wrong. If it feels daunting, think back to a time when you overcame a challenge or achieved something great. What did you learn?

Changing your money mindset can be difficult, but a more positive outlook on your finances can leave you feeling confident and relaxed about the future.

Remember, your investments can go up and down and you could end up with less than you started with. Past performance does not guarantee future results. The information provided is financial guidance and should not be considered financial advice.