How Shifting My Money Mindset Turned My Financial Life Around: Practical Steps to Take Control of Your Wealth
If you’re reading this, you might feel like your finances are a never-ending struggle. Maybe you’ve tried budgeting, cutting expenses, or saving more, but nothing seems to stick. I’ve been there. A few years ago, I was drowning in $40,000 of debt, had no clue how to talk about money with my partner, and avoided checking my bank account like it was the plague.
But here’s the thing: turning your financial situation around doesn’t start with cutting back on lattes or tracking every penny. It starts with changing your mindset about money. Once I shifted how I viewed money, everything else started falling into place. I became more confident, created better habits, and—most importantly—started building wealth.
In this post, I’ll walk you through the exact steps I took to develop a powerful money mindset, one that helped me get out of debt, make smarter financial decisions, and start building the life I dreamed of. Trust me—if I can do it, you can too.
Step 1: Identify and Confront Your Money Beliefs
Most of us have subconscious beliefs about money that we carry with us from childhood. These beliefs can stem from things we overheard as kids or lessons passed down from parents or society. Whether we realize it or not, these beliefs shape how we interact with money and how we approach our financial decisions.
For example, I grew up with the idea that people who were rich were somehow "bad" or selfish. I also had the habit of always grabbing “good deals,” even if I didn’t need the item. These beliefs were limiting me. They kept me stuck in a cycle of poor financial decisions and prevented me from seeing money as a tool for empowerment.
The first step in transforming my money mindset was to sit down and really examine these beliefs. I wrote them out, one by one, and asked myself: Is this belief helping me achieve my financial goals, or is it holding me back? If the answer was “holding me back,” I knew it was time to let it go.
This is a practice you can try too. Start by journaling about your thoughts and feelings regarding money. Do you have any limiting beliefs about wealth, success, or money in general? Are there any beliefs that could be keeping you stuck in a financial rut? The key is to identify them and start replacing them with healthier, more empowering beliefs.
Step 2: Create a New Money Persona
Before I could make any significant changes in my financial habits, I needed to change how I saw myself. Too often, we set financial goals based on the outcome—like paying off a credit card or saving for a vacation—without considering the process or the identity that goes along with those goals.
As author James Clear explains in Atomic Habits, to make lasting changes in your behavior, you need to focus on building identity-based habits. In other words, rather than just trying to pay off debt or increase your savings, you need to shift your self-perception and adopt a new identity.
I created a new “money persona” for myself: Luxury Kate. Luxury Kate views money as a tool for self-care. She spends intentionally on things that improve her quality of life, while also saving and investing wisely. She feels confident and empowered when managing her finances.
Your money persona should be someone you admire and aspire to be. Write out a detailed description of how your money persona behaves with money. What’s her name? How does she act when it comes to saving, spending, and investing? What habits does she practice?
The goal is to step into this persona and start making financial decisions that align with your new identity.
Step 3: Start Practicing Higher-Level Thoughts
This step is about mindset shifts that help you see opportunities rather than obstacles. One of the things I learned in my journey is that it’s easy to fall into the trap of thinking “I’m bad with money” or “I’ll never get ahead.” These are what I call “lower-level” thoughts, and they keep you stuck in a victim mentality.
On the other hand, “higher-level” thoughts are positive, forward-thinking, and empowering. For example, instead of thinking, “I’m terrible at budgeting,” I started telling myself, “I am learning how to budget better every day.” Instead of thinking, “I’ll never be able to retire,” I replaced that with, “I can start investing today, and it’s never too late to build wealth.”
Shifting from lower-level to higher-level thinking changes your whole approach to money. It helps you stop focusing on problems and start thinking about solutions and opportunities.
Try this out for yourself. Whenever a negative thought about money enters your mind, challenge it with a higher-level thought. This simple shift can have a profound impact on your financial outlook.
Step 4: Invest in Your Financial Education
Finally, if you want to become truly confident with your money, you need to invest in your financial education. There’s no magic formula for building wealth, but there are principles and strategies that anyone can learn. The more I learned about personal finance, the more confident I became in my ability to manage money.
I read books, took online courses, and learned from people who were more experienced than I was. I also subscribed to blogs, watched YouTube videos, and participated in webinars. Financial education is an ongoing process, and the more you educate yourself, the better equipped you’ll be to make informed financial decisions.
Some great resources to start with are:
These books can help you get a clearer understanding of how to manage money, invest, and build wealth. Don’t be afraid to dive deep into financial topics like budgeting, investing, and passive income—learning these things will pay off in the long run.
Conclusion: Your Money Mindset Shift Starts Today
Making a shift in your money mindset isn’t an overnight process, but it is the key to building lasting wealth. The four steps I’ve shared today—confronting your money beliefs, creating a new money persona, practicing higher-level thoughts, and investing in your financial education—are the foundation for creating a healthier, more positive relationship with money.
I know it can feel overwhelming at times, but remember, you’re not alone. Every step you take toward changing your mindset is a step toward financial freedom.
Here’s to a future of abundance and financial freedom!
— Kate
Here are all of my favorite Smart Money Moves resources on Amazon! Smart Money Moves
Affiliate Disclaimer: Some links in this post are affiliate links, meaning I may earn a small commission if you make a purchase through them at no extra cost to you. I only recommend products I personally use and love.
