The Psychology of Taking Charge of Your Money

The Psychology of Taking Charge of Your Money from North Carolina Lifestyle Blogger Adventures of Frugal Mom

Changing your finances is not an easy thing to do. This is not because we have made colossal mistakes that we cannot repair, nor because personal finance is an abstruse social science, nor because few opportunities exist in the modern world for most people to flourish. 

All our reasons for not prospering are invalid. Millions of people have overcome financial losses and setbacks, including recovering from heavy debt. Similarly, personal finance is commonsensical, comprising principles like “live within your means.” And, when it comes to opportunities in the modern world to make a buck, there have never been more opportunities to learn more and earn more.

Going beyond survival is not a complex problem. We struggle to make money for one primary reason: we don’t understand our own psychology around money. Let’s look at two common financial issues to see what role psychology plays in our financial decisions. 

The Psychology of Managing Money

When you experience high debt, say debt because of the liberal use of your credit cards, you don’t notice debt-repayment methods like credit card refinancing.

You don’t notice solutions because your psychology gets in the way.

Chances are that focus on self-blame, feel guilt and shame, and behave irrationally, perhaps using an ineffective way to pay off your debt, perhaps throwing up your hands and not paying anything at all. 

Let’s try a thought experiment.

Imagine that you woke up one morning after a profound dream that changed your attitude about everything going on in your life. All your real-world problems are the same as before, but you are not the same person. You see things clearly, without anxiety or despair clouding your vision.  

When you think about your high debt, the following thoughts run through your mind: “I’ve made some mistakes, but I’ve learned from them and now know how to manage my money better. I’m going to love and forgive myself and research a more efficient way to pay down my debt.” 

Because you now have a new mindset about money, you do some online research on what other people with high credit card debt have done, and you learn about effective debt restructuring methods.  

When you change your mind about financial problems, you can resolve them. 

The Psychology of Making Money

If you are not earning enough, then your psychological glitch is a lack of trust.

If you work for a good company, you don’t trust the corporation to take care of you or your colleagues to help you with your projects, so you only do the bare minimum to avoid getting fired.

If you are working for a dysfunctional organization, then you don’t trust yourself to find a better job.

If you are burned out on working for corporations, you don’t trust yourself to learn Internet marketing skills to create an online business.

In short, your own psychology of distrust, not the corporation, your colleagues, or the country, is stopping you from earning what you need to live a comfortable life. 

The solution to all your earning woes? Just trust.

Surviving or Thriving? 

If you are merely surviving and not thriving, it’s not because of what you believe based on what the media and everyone around you have told you.

You are not struggling to make money because of politics or the pandemic, education, or economics. While these have some effect on your life, what’s really stopping you from flourishing in hard times is your own psychology, more specifically, how you think, feel, and act. When you change your psychology around money, then you will see possibilities that you had never noticed before. 

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