Cultivating a wealth mindset: why more money won’t necessarily make you richer

by | Sep 15, 2022 | Managing Your Finances

Cultivating a wealth mindset

What if we told you that you didn’t need to earn more money to be wealthy? Sure, more money can be helpful, and if you’re struggling financially, a little extra cash might just take you from sinking to floating. But, if you’re thinking that your next pay rise is the be-all and end-all to your financial freedom. Think again.

This is because being wealthy is more about having the right mindset and using your money wisely than it is about how much you earn. Someone who earns $200,000 and fritters it away on expensive gadgets or clothes and fancy dinners out isn’t necessarily better off financially than someone who earns $50,000, budgets carefully, and spends within their means. They’ll just have more “stuff.”

Now, Kiwis are notoriously bad savers, preferring to spend unless there’s no other option. Data from Stats NZ shows that in March 2022, kiwis spent nearly every dollar that they earnt. But, when the country (or large parts of it) were in lockdown in 2020 and 2021, spending dipped considerably.

Kiwis also suffer from Tall Poppy syndrome, preferring to tear down those who succeed rather than see them as worthy of the reward they’ve received for their hard work. And, as money is often a marker of success, we’re not always that keen on those who have worked hard and are rewarded with financial wealth.

So, it would appear New Zealanders haven’t necessarily been blessed with a wealth mindset.

But we’re here to help change that.

So, what is a wealth mindset?

Wealthfit describes a wealth mindset as “a set of beliefs, habits, and behaviours that separates the wealthy from the rest. A wealth mindset guides you to make the most of the money you have. It means spending less, making wise investments, and looking for ways to improve financial standing with minimal risk.”

As per the definition above, having a wealth mindset isn’t necessarily about earning a heck of a lot of money. It’s more about how you are using that money mindfully to build wealth. Which could lead to potentially higher earnings down the track.

Instead of getting to payday and rewarding themselves by shopping up a storm and ending up with too much month at the end of their money, someone with a wealth mindset will know exactly where most of that money will be going. They’ll have planned how much will go towards their mortgage or rent, how much will be put aside for bills, how much will go into savings and investments, and therefore how much they’ll have to spend on the fun stuff. If they have their eye on something special, they’ll first determine whether it’s something that they actually want and if so consider whether it fits in with their current spending plan or if they’ll have to set up a saving plan to get it later.

This doesn’t however mean that someone with a wealth mindset never makes an impulsive purchasing decision, or never comes across unexpected costs – they are human after all. However, they’re generally in a position where they can withstand a setback and don’t see it as an excuse to let all their hard work fall to the wayside and spend more than necessary as “they’ve blown the budget anyway.”

Any ‘hacks’ to help get me there?

Having a wealth mindset is achievable by anyone. But just like accumulating wealth, it’s not going to happen overnight.

As Hannah McQueen says, “Most people are capable of better outcomes. They just don’t know how to unlock it. When they’re looking at their situation there isn’t an obvious thing that they’re doing wrong.”

So, here are a few things to help you get started:

  • Have a positive mindset around money and wealth. Having money and being wealthy isn’t ‘evil’ and the desire to better your financial position is worthwhile.
  • Surround yourself with people who also see money positively – their attitude may just rub off on you and you won’t be brought down by those who have a negative attitude.
  • Be organised and have a plan – set up automatic payments for your savings and investments and set aside the amount you’ll need each month for bills as soon as you get paid (and make sure to pay those bills on time)
  • See money as a way to improve your life, and a way to invest in yourself – whether that’s literally through investing money so you have enough during retirement, or investing in your education so you can get a higher paying job
  • Take control of your money – Find your fritter and eliminate it, set a financial goal and a plan on how to achieve it, take some time to review your finances and discover other inefficiencies (like lazy tax) and get help if you’re struggling

Changing your mindset can be hard, especially if it’s born from a lifetime of scarcity or an unhealthy relationship with money. If you’re keen to discover how you could cultivate a wealth mindset and achieve a better financial outcome, book a consultation with an enable.me coach. They’ll be able to assess your financial situation, see where there’s room for improvement, and help you cultivate a mindset that will see you reach financial success. Book your initial consultation today.

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