We all have various beliefs that guide our lives. For example, beliefs about what kind of people we are, what we know, what we can know and how possible prosperity is for us. All these beliefs guide us unconsciously.
Most of us have lived our lives thinking we’re a certain kind of person and that we have certain, limited opportunities in life. Fortunately, the beliefs that we have about ourselves are not always true. Therefore, it’s important to let go of those limiting beliefs and embark on a journey toward your dreams.
In this post, I’m busting seven common but limiting money beliefs. I hope that after reading this, you will let go of your beliefs and start an adventure towards your financial dreams!
7 limiting beliefs about money
"I can't save/invest/get wealthy with my salary."
One of the most common limiting money beliefs I hear people say is that their salary is too low to save or invest. People mistakenly think that they don’t earn enough to save money – never mind get rich! While it’s true that your salary is unlikely to make you rich, what you do with that money is what makes the difference.
If you believe you earn too little to save or invest, I ask you to look around at your co-workers or peers at a similar pay level. It’s likely one always runs out of money before the next paycheck, the other seems to live a very middle-class life and the third openly says they invest. How is that possible if everyone earns about the same amount? The likelihood is the first one has never learned financial literacy, the second one has good money skills and the third one has realised how getting rich works.
When I bought my first property a few years ago, my manager asked me how I could still afford so many holidays abroad. They naturally earned more than I did so what was stopping them from making the same financial decisions? It all comes down to your money mindset and money management skills.
Life situations vary, but everyone is able to improve their financial situation as long as they decide to do so.
"I never have money to spare."
Many people find their expenses increasing as their income increases so they are always balancing on the brink of not having enough. This phenomenon is called lifestyle inflation or hedonic adaptation.
You cover all your expenses, but no matter how much you earn, there is never any extra left. This often leads to the belief that there is never going to be enough money for you to have money to spare to save or invest.
If this sounds like you, learn to pay yourself first. This means putting aside a set amount of money for a savings or investing account from your main account as soon as your salary lands there.
"If I won the lottery, I'd live my dream life."
Did you know that statistics show that most lottery winners end up broke or even go on to declare bankruptcy?
Yet many of us dream of winning the lottery and believe that the life of our dreams is behind just a correctly guessed bet. If you think this way, what would you do if you won the lottery? Would you quit your job and travel the world? Would you start your own business that you’ve always wanted? Or could you start building your dream life here and now, without that lottery win?
Money sure provides security, opportunities and freedom. However, making your dreams come true is possible without sudden riches. And if the statistics are to believe, you are more likely to maintain that lifestyle if you build it for yourself.
"Investing is only for the rich."
Another extremely common limiting belief about money is to think that investing is only for those who already have lots of money. Fortunately, this simply isn’t true. Investing is a key to building wealth and luckily online fund platforms and apps have opened up investing to the masses. These platforms allow you to start investing even with a small amount.
You can start small and ‘drip-feed a small amount every month into an investment account. It’s easy to set up a direct debit to your investment account, so you can make the process as automated as possible.
Investing small sums on a regular basis can also help to smooth the ups and downs of the market. In other words, you buy more shares when their price is low, and fewer when their price is high, which may even-out performance over the long term. You can, of course, also invest a lump sum in the market.
How much you invest depends on your financial situation and ultimate financial goals. But to begin with, you don’t need to be rich by all means.
"Investing is too risky."
Stories of market crashes may give you the impression that investing is the path to financial losses. However, it’s important to note that investing is not gambling. That is not to say that investing wouldn’t come with any risk at all. But statistics show that, given enough time, you will make significantly more money by investing in the stock market than by saving in cash.
To alleviate risk, you can secure your capital by diversifying your investments wisely. If you want to invest in the stock market, this can be done by focusing on index funds and ETFs instead of buying individual stocks. Long-term, you can also consider investing in other asset classes, such as property, to further diversify your portfolio.
Even if you started investing just before a stock market crash, building wealth is still possible. Buying small amounts each month according to your own investment plan will help you spread the risk further. Even if the market crashes, eventually, it will start to rise again and you’ll start to see your wealth accumulating.
Related: How to Diversify Index Funds
"Money is there to be spent."
Tomorrow is not guaranteed so all the money it’s worth spending all the money right away to enjoy life, right? Let’s think again.
I fully believe that life should be enjoyed – even studies show there are ways money can buy happiness. However, I also know that the stress of not having enough money to achieve your future goals can be extremely consuming. If you didn’t have money worries, would your life be better and more carefree? When your personal finances are permanently on a solid footing, it’s easier to live like it was your last day.
Clearing limiting beliefs about money
If any of these limiting money beliefs prevent you from building wealth, take action and change your beliefs! When you start educating yourself about personal finance and investing, you’ll begin to realise that getting rich is possible for you too.
Are you ready to let go of your limiting money beliefs and finally become financially free?
I’ve talked to so many people about these things since I started my own financial recovery – the 1st point is the biggest! While there are exceptions for extreme poverty, even low income earners can get ahead by changing their spending habits.
These are great points! I think people look for that immediate gratification over long term growth and that keeps people stuck where they are at. Thanks for sharing!
Loved this post. I should definitely focus on my money mindset and management
Thanks for your comment! It’s incredible how much a healthy money mindset and management skills can do to your financial success.