While I like to think that I have a pretty healthy relationship with money — I save, I try to stick to a budget (key word: try) — I still have nagging negative thoughts about my income and what I choose to do with it. And I’m not alone. No matter our financial situation, we all have our money-related sore spots. From thinking “I’ll never pay off those high student loans” to the belief that we can only make money if we already have money, there are plenty of negative thoughts that seep into our subconscious and can hold us back financially.
That’s because repeating — and believing — pessimistic thoughts can be completely detrimental: It not only brings you down emotionally, but the beliefs you hold can morph into self-fulfilling prophecies. It’s not hard to turn them around though. Here are 12 common negative money beliefs and how to reframe them for more positive results.
You Think: “I don’t make enough money to save.”
After the bills and expenses are paid each month, and you've used a bit of your hard-earned paycheck to have some fun, you may not have much left over. But rather than write off this meager (in your mind) amount, realize that anything you can put away helps secure your future. The consequences of not saving, even just a miniscule amount, means you aren’t preparing for emergency situations or for your future. Instead you’ll have accumulated a lot of things that have no real value, says consumer- and money-saving expert Andrea Woroch.
"Most of us have had times in our lives where there was no other option but to live paycheck to paycheck. Often this becomes our regular habit, even after it’s no longer necessary," Woroch says. "Reign yourself in with attainable goals and review your budget as there are likely areas you can cut back considerably." Start small, she advises. “Skip happy hour a few times per month, brown bag your lunch a few days per week, skip the fancy dinner with friends, do your own manicure or wash your own car—all these small strategies can translate into more money in your savings account,” she says.
You Think: “Money only causes problems.”
More money, more problems, right? Not so, says Steve Siebold, author of “How Rich People Think.” “Money solves problems," he says. "The average person has been brainwashed to believe rich people are lucky or dishonest. Money doesn’t guarantee happiness, but it does make life easier and more enjoyable."
Often it’s our own bad behavior that informs our negative view of money, says Alex Matjanec, cofounder of the finance site MyBankTracker.com. “Until you realize that money isn't the problem — in fact, you are — you risk making the same financial mistakes over and over again.”
So, take a look at your own behavior and what's driving your thinking. “For instance, maybe you don't want to open a joint checking account with your spouse because you think money causes problems in a relationship,” Matjanec says. “Do you not trust yourself to have a joint checking account? Would it reveal your poor spending habits? Do you think your partner is financially irresponsible? Answering these types of questions will help you realize what your true issue with money is.”
You Think: “It's more difficult to get rich these days.”
Resigning yourself to your current financial status certainly limits you. In believing you’ll never rise money-wise, you likely never will. But focusing solely on becoming “rich” is also problematic, Matjanec says, because becoming wealthier requires a healthy dose of reality — and taking smart action.
"The truth is that getting rich has always been difficult unless you were born into money," he says. "But if your goal is to get rich, you [may] need to readjust your mindset." Of course Matjanec doesn’t admonish those who want to improve their financial situations, rather, he encourages them to do it responsibly.
“Aspiring to be rich like Bill Gates or Mark Zuckerberg isn't an issue. You should definitely have lofty goals and try to achieve them, but you should also be realistic with your expectations. What are the practical, reasonable steps you can take to achieve that goal?” he says. “A lot of people want to be rich—and a lot of people aren't ever going to be.”
He explains, however, that anyone — yes, anyone — can make themselves wealthier, no matter what their income, by thinking about money in a more pragmatic way. “Increasing your personal wealth, budgeting, and spending money for educational achievement might help you reach that bigger goal,” he advises. “Focus on those smaller, more reasonable goals to achieve the success and wealth you crave.”
You Think: “I'll never pay off my school loans.”
As of April 2013, the collective student loan debt in America totaled $1.2 trillion, with two-thirds of students graduating needing to pay back a lender for at least some part of their tuition. These are sobering facts, to say the least. And if you’re one of many people writing that loan check each month, looking at your still-so-high balance can feel overwhelming.
But while your loans may loom, facing them head-on is key. "If you adopt the attitude that you'll never pay off your student loans then you never will," says Andrew Schrage, founder and CEO of online financial resource MoneyCrashers.com. "Those debts will nag at you for the rest of your financial life until you decide to do something about it." If you're having trouble paying back your loans, he suggests researching two government programs designed to help, the Pay As You Earn Program and the Income-Based Repayment Plan.
You Think: “I'm never going to understand investing; why bother?”
If you’re like many people, your eyes start to glaze over the moment you’re confronted with decisions about investing, from figuring out what funds to choose for your retirement account to having to decide if you should put your savings in an index or a mutual fund. “Investing is confusing because it's a rather broad topic and it's not it's taught much in schools,” Schrage says. “Whether to invest in stocks or bonds, international funds or domestic, to invest in tax advantaged accounts or not—the list goes on. What that typically leads to is frustration or the thought that an individual will just never be able to grasp the many facets of investing.”
But putting in a little effort to learn the basics—and powering through the initial confusion or frustration—can end up earning you money you’d never see otherwise. Investing is a great way to put your money to work for you, Schrage says. Understanding investing is not that difficult as long as you use the right approach: Set aside the time to do careful research, then take on individual investing strategies one at a time. He suggests starting with a 401(k) plan and looking into Individual Retirement Accounts (IRAs) to put your newfound knowledge to good use. "You'll thank yourself once it's time to call it a career," he adds.
You Think: “I'll never make as much money as so-and-so.”
"Comparison is the death of joy," Mark Twain famously said, and nothing could be truer when it comes to dwelling on how your financial situation stacks up to your friends' or acquaintances'. Figuring out where you rank with the Joneses will only make you frustrated, depressed or even resentful. "There's no point in comparing your income to others’, because what other people earn shouldn't matter to you," Schrage says. "Focus instead on creating your own set of income goals — commensurate with the lifestyle you would like to lead — and get to work on achieving them."
You Think: “I can only make so much money in my chosen field.”
According to Siebold, many people tend to look at the top earners in their field who aren’t making a lot of money, and then become discouraged thinking that’s as much as they’ll ever be able to make. He says this belief is a detrimental way of looking at your financial future — and will no doubt hold you back.
“It’s a very linear way of thinking: ‘As I advance up the rankings I’ll make more money,’” he explains. “This sets the person up to believe the only way to make more money is to work harder or get a promotion. If you want to make more money, take a non-linear approach to your thinking.” Rather than telling yourself you'll only be able to make X amount of dollars per year, change your expectations. Sure, your base salary might be the same but by setting your sights higher, you'll discover new opportunities for income.
"The reality is there are always new ways to make money in any field," he says. "Take a close look at your industry and ask yourself, 'What’s the biggest problem facing this industry?' The person who can solve that problem is going to be rewarded nicely. There are always problems to be solved."
You Think: “I'm too old to start saving for retirement.”
If you’re in your late 50s and don’t have a sizable balance in your 401K — perhaps you’re self-employed or your company doesn’t match so you never contribute to it — panic could start to settle in. Retirement age (for those born after 1959) is now 67, meaning you’ll have to save enough to get you through your non-working years in a decade or less.
It’s a scary prospect, but it’s not impossible. "Are you earning money? Can you save some of it? If you answered yes to both questions, then you’re not too old to start saving for retirement," Matjanec says. "The problem with thinking you’re too old to save for retirement is that you’ve given up without exhausting all your options." While you might need to put away more money than you're used to and cut your entertainment budget for now, you need to take action. "The important thing is that you try," he adds. "Consider what it would take to live decently in retirement." Set goals and determine a course of action.
On the flip side, a related point of negative-talk to ban is: "I am too young to think about retirement," Woroch says. The earlier you start putting money away, the more compound interest you'll reap over the years.
You Think: “You need money to make money.”
This belief holds so many people back. “If you tell the average person they need money to make money, they’re going to quit right away because the first thing that comes into their mind is, ‘I don’t have any money, so if I need money to make money, there’s nothing I can do,’” Siebold explains.
This cliché is limiting at best and destructive at worst — the sooner you stop believing it, the sooner you'll be able to launch that business or take a new idea to the masses. "While the middle class believes you have to have money to make money, the wealthy believe in using other people’s money [to make money]," he says. "The wealthy know money is always available because rich people are always looking for great investments and superior performers to make those investments profitable."
With social media and crowdfunding platforms, anyone can attract interested investors these days — if what they want the money for is truly innovative. "The truth is you have to have great ideas that solve problems," he says. "If you do, you will attract money like a magnet."
You Think: “Money isn't that important.”
While the masses may think money corrupts people — and while it seems selfless to think we don't need our material attachments and could do without having cash in the bank — this ideology is not realistic. Money isn’t everything, but it is definitely important. Siebold actually chides this phrase as "delusional" thinking, explaining that money is not only life-changing, but can be life-saving.
"Money can give you the freedom to see the best doctors if you become stricken with a life-threatening illness, for example," he says. "It can ensure you are able to make yourself as comfortable as possible if you can’t recover from that illness." Wealthy people, he adds, actually have the ability to buy their way out of any unpleasant situation, from unhealthy work environments, to unhappy living arrangements. "The examples of how money buys freedom and is important are endless," he adds. "While this infuriates the masses, it motivates the ambitious to get rich."
You Think: “I’m not checking my credit card balance, because I don’t want to know.”
Let’s say you know you’ve done a bit too much online shopping this month, and facing the truth sounds a lot scarier than simply trying to forget. On the logistical side, this way of thinking can be dangerous, Woroch says, because if you’re using a debit card for purchases, you could end up overdrawn, and if you’re using a true credit card, you’re not paying close attention to any fees or mischarges that can pop up.
“With the rise of the retail data breach it’s important to check and monitor your account regularly for small purchases as these thieves attempt to charge unsubstantial amounts of money to go by undetected like $1 or $10,” she explains. “In fact, in January the Better Business Bureau warned consumers of a widespread credit card scam that charged cards just $9.48. Those who are not vigilant about checking their credit, checking and savings accounts could have funds stolen without any detection!”
Woroch also warns that you must resist the feeling that if you’re so in debt it's no big deal to add more to it. "The more debt you have, the longer it will take to get out of it and the more expensive the interest," she says. "Face your fear and go over your finances in detail. Having this information will help you prioritize and make smart decisions going forward." She suggests using Mint.com, which makes the process less intimidating and can help you create a sensible spending plan for the future.
You Think: “I've made too many money mistakes to ever recover.”
From racking up credit card debt on what now seem like unimportant purchases to making what turned out to be poor investment choices, money mistakes can haunt us for years to come—not only financially but emotionally as well. However, Matjanec notes that even financial successes like Steve Jobs and Warren Buffett failed miserably and were able to bounce back — facts you should remind yourself when the negativity loop starts going through your head. "Just because you’ve made mistakes in the past doesn’t mean you have to make them over and over again," he says. "Instead of dwelling on the mistakes you’ve made, look to the future."
The first thing to do? Don’t panic. Even if you can’t undo your mistakes, you have to make the best of your situation, evaluate your options and focus on long-term goals. “Think of your failures as learning lessons," he advises. Be smart about the money choices you make going forward and don’t let the past hold you back.