Gaining a Financially Fit Mindset

From an early age we are trained to be habitual consumers and spenders, not to budget and save. Every television or magazine ad reinforces the idea that you need to go out and buy, even if you already have everything you and your family need. Many people are satisfied and content in their lives and with their lifestyle. But there is also a huge, powerful apparatus that was created for the sole purpose of convincing them that they aren’t happy and they need to live beyond their means. After all, this is business and capitalism and everybody needs to figure out how to make a buck, here in the Land of Opportunity. If consumers stop consuming, the whole machine grinds to a halt.

But ours is also a culture where people take pride in thinking for themselves, which we all need to do to avoid financial pitfalls.

Society often pressures us to believe that financial success is about status symbols and keeping up with the Joneses. With that kind of mindset, and the right kind of persuasive advertising, someone might get the urge to go out and buy a brand new truck or a new luxury sedan, even if they cannot afford it. Lenders line up to help them borrow the money, and all they have to do is sign some papers. It’s so easy that it can be irresistible. But it can also be rather addictive, and very misleading.

Those who are selling stuff try their best to give you the itch. That’s how they put food on the table. Then those who earn a living by making money off of your debt help you scratch that itch. That’s all well and good, as long as it doesn’t coerce you into doing something that takes food away from your own table.

When you got a mosquito bite and your mom told you not to scratch it or it would get worse, she knew what she was talking about. She was trying to help you avoid the more troublesome consequences of a behavior you engaged in without thinking it all the way through. She was also teaching you a great lesson about the healthy financial mindset I want you to develop. A healthy mindset is one that looks past the immediate thrill and hype, to analyze the real-world outcome.

You will not be outsmarted as long as you do the smart thing.

That’s how we teach our kids to avoid developing bad habits like smoking or drinking and driving. We teach children that some things that feel good in the moment will make you miserable down the road. A slice of cake eaten in moderation makes you happy. Keep eating until the whole cake is gone and you’ll be sick and never want to see another dessert for the rest of your life. A credit card, for instance, is a very convenient financial tool. Max it out, however, and it can be your financial downfall.

A financially fit mindset is all about wise choices, moderation, and living an intentional life that will reward you with abundance instead of punishing you with scarcity. That’s why it’s important to train yourself to keep your own financial best interest in mind, even when you are bombarded with slick marketing to convince you to act impulsively instead of wisely. Learn to see more than one angle and then do what benefits you in the short term as well as the long term.

It may take a little effort and practice to change your mindset from one that is conditioned by consumerism to one that is strategic about becoming financially comfortable and secure.

Let me give you a classic example of how we are taught to think about finances in a way that’s not completely realistic or helpful:

You purchase a house and put 15 percent down to take out a mortgage, and the bank congratulates you on home ownership. That makes it sound like the house belongs to you. But think deeper and you’ll realize that you don’t own the whole house, you only own 15 percent of it. The bank owns the rest. Too many so-called “homeowners” learned that the hard way when they were evicted through foreclosure during the Great Recession.

We are not accustomed to understanding personal finance in such straightforward and transparent terms. What you actually own when you take a loan is an obligation or pledge to repay a debt. In fact, the origin of the word “mortgage” is a French word that means “death pledge.” I don’t know exactly what that means, but I do know it sounds pretty dark and extreme. I also know that your banker doesn’t want to have to try to explain that French word to you in plain English when you’re filling out a mortgage application.

I’m not saying you shouldn’t take out a loan or buy a house. Depending on the circumstances, that can be a wise financial step. All I’m trying to emphasize is that things are not always as they look on the surface, when it comes to personal finance. These are just illustrations of how our way of looking at consumer choices are clouded and twisted around by decades of conditioning, misinformation, and less-than-truthful marketing.

We have to retrain our minds to think about personal finance in a clear-eyed way that cuts through the hype. This will give you back the power to control your financial destiny and develop the mindset needed to avoid common pitfalls, make smarter and more informed choices, and develop habits that ensure financial fitness.

When I started changing my financial mindset and habits, I had to work at it. It’s like training a muscle that you haven’t used for a while. But now it’s almost second nature. Making good choices and practicing financial habits that put me and my family on strong financial footing comes much easier now. They have become part of my lifestyle. The more I adhere to these financial fitness principles, the easier the process becomes and the more positive momentum I have to fuel my financial success and give me more financial freedom. Now my view of personal finance is becoming clear and insightful, rather than confused and stressful.

That’s what a financially fit mindset will give you.