Our beliefs about money shape our financial reality. If we believe that we’re not worthy of wealth or that it’s impossible to achieve financial success, those beliefs will become self-fulfilling prophecies.
Most of us have lived our lives thinking we’re a certain kind of person and that we have certain, limited opportunities in life. But our beliefs about ourselves aren’t always true. Fortunately, we can change our beliefs and create a new financial reality for ourselves.
In this post, I’ll challenge seven common limiting money beliefs and show you how to replace them with empowering beliefs. I hope that after reading this, you’ll be inspired to take steps to achieve your financial dreams!
7 limiting beliefs about money
Here are seven common yet limiting beliefs about money that can prevent you from building wealth.
1. "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 at work 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 can improve their financial situation as long as they are willing to put the effort and commitment to it.
2. "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.
3. "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.
4. "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 platforms and investment 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. Some investment apps let you invest with as little as £1 and even offer automated investment features that help you put money aside for investments automatically. Some great examples of beginner-friendly investment apps are InvestEngine and Plum.
Investing small sums regularly 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 outperform 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.
5. "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. In the 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 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.
6. "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 finances are permanently on a solid footing, it’s easier to live like it was your last day.
7. "It's greedy to want a lot of money."
The belief that wanting a lot of money is greedy is often spread by people who either have a lot of money themselves or who are afraid to take risks and go after their financial goals and dreams.
However, it is perfectly fine to want to be wealthy. Wanting a lot of money can motivate you to work hard, achieve your goals, and make a positive impact on the world.
Sure, some people spend their money on things that are considered ‘bad’ or superficial. But there are also countless ways to use money for good. You can use it to invest in yourself and your education, start a business and create jobs, donate to charity, provide for your loved ones and enjoy life with them, or simply enjoy life’s pleasures.
If you feel guilty about wanting a lot of money, ask yourself why. Are you afraid of what others will think? Are you worried that you’ll become greedy if you have too much money? Challenge yourself to let go of these limiting beliefs and pursue your financial dreams.
How to overcome your limiting money beliefs
Overcoming your limiting beliefs about money might not always be easy – especially if you’ve believed in certain things for your whole life. But here are some simple, yet effective ways to get started:
- Identify your limiting beliefs. What are the negative thoughts you have about money? What are the stories you tell yourself about why you can’t be wealthy or achieve your financial goals? Once you’re aware of your limiting beliefs, you can start to challenge them.
- Question your beliefs. Ask yourself if there is any evidence to support your limiting beliefs. Are they based on facts or fear and self-doubt? Try to see your beliefs from a different perspective and challenge them with positive thoughts.
- Replace your limiting beliefs with empowering beliefs. When replacing your limiting beliefs about money, focus on cultivating an abundance mindset. This means believing that there is enough money and abundance for everyone and that you are worthy of receiving it. Instead of telling yourself “I can’t afford that,” tell yourself “I can find a way to afford that.” Instead of telling yourself “I’m not good enough to be wealthy,” tell yourself “I am worthy of abundance and prosperity.”
- Educate yourself about money. The more you know about money, the more confident you’ll feel about managing your finances and achieving your financial goals. Read books and articles about money, take financial planning courses, or talk to a financial coach or advisor.
- Surround yourself with positive people. The people you spend time with can have a big impact on your mindset and beliefs. Make sure you’re surrounding yourself with positive people who believe in you and your ability to achieve your financial goals.
- Take action. Don’t just sit around waiting for the money to come to you. Take steps each day to move closer to your financial goals. This could involve saving money, investing, or starting a business.
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.
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