Money Mindset??
It seems to be a buzzword - it’s everywhere at the moment.
My theory is that people are starting to feel a bit financially tired after covid, lockdowns, flu season and back to school cancellations. And now add to that, news that 4 billion mortgages on fixed rate will need to pay double the rates in the next few months….
Yep! Things are a bit wild at the moment. So it’s a pretty good hook to get your attention.
But marketing tactics aside. I do think this this conversation is useful! Because sticking our head in the sand when the ride is about to get wild - that’s not a great solution.
So first of all, what IS money mindset?
A money mindset is your belief around what opportunities and financial success is available to you.
It can influence how you handle money and how you make financial decisions.
It can also influence if you’re happy taking risks to grow your business - or stay in your comfort zone and potentially play small because you don’t feel like financial success is meant for you.
A positive money mindset might include beliefs such as “yesss gurl! I absolutely have the ability to earn and save serious money!”
While a negative money mindset may include beliefs such as feeling like there is never enough money - or that wealth or success is just out of reach for you.
Taking a risk to take a path untraveled is going to be really hard when you have this mindset. And interestingly it’s like a self fulfilling prophecy! Because you play small/ safe, and what’s needed in order to build a successful business is a little bit of crazy…..
So is it as simple as just “visualising money falling from the tree and it will happen”??
I often hear “just visualise it and you’ll make more money than you ever imagined!” Or “you just have to adapt a positive mindset and things will work out just fine”.
It’s an attempt to simplify the concept of a positive money mindset, I know. But as much as visualisation can absolutely be super helpful (I highly recommend it as your brain experiences what you visualise as if it’s happening right now) - it’s a bit of a dream - and i often see it crash and burn twice as hard….
Because we all know that running a business is about more than just dreaming big. There’s a follow up to that - and that’s action...
Where does this negative money mindset actually come from? Don’t we all feel like we’re deserving of good things?
Well, i have examined this in my experience coaching clients and also my own journey - and 3 root causes stand out to me;
- A lack of competence + confidence
- Overwhelm
- A lack of growth mindset
Let’s explore...
1. Competence, confidence and money mindset
Fact: we are not born with confidence! Confidence is something we have to build over time. It takes practice.
About a year ago, whilst walking on the beach in Palm Cove I listened to an epic episode of Brendon Burchard’s podcast.
It was around the concept of idea Confidence and Competence - and it just clicked! So simple, yet so profound...(I can’t for the life of me find the episode but I’ve linked one of his other episodes in my newsletter).
Brendon Burchard is one of the world’s top high performance coaches and a speaker who has written extensively about the relationship between competence and confidence. Fun fact: I did my High Performance Coaching certification (one of my two coaching certifications) with Brendon. He’s pretty special!
Brendon talked about a simple and so clearly logical concept: when people feel competent in a certain area, they are more likely to feel confident in that area as well. In other words, as people acquire knowledge, skills and experience in a specific area, they develop a sense of mastery which leads to an increase in confidence.
Competence in numbers.
Most business owners I speak to (and yep I was there too!) who don’t have a positive money mindset, also don’t have a great understanding of the underlying drivers of their business performance.
Most actually avoid looking at the numbers because it makes them uncomfortable. Either because they dread the worst. Or because they simply don’t know how to interpret them (competence).
The story that comes to mind for me is “that time” when we had our best month on record and I was crying on the phone with my then coach because “we were having such a bad month!”
Ummm. We had so many cancellations and because I wasn’t looking at the numbers - I was too busy looking at the big glaring white gaps in the books. So I had no idea that in fact the team were maximising every opportunity... And as a result our occupancy was lower but revenue was higher! And I missed it.
I didn’t get to celebrate the win it was. I was focused solely on telling the team to do better (oh the guilt!…..). Had I had the competence in numbers I would have been able to take an entirely different approach with my team - and who knows - we might have even had a better month!
So it’s important for you to understand the key drivers of your business; your retention and rebooking rates, average spend, average visitation rates, new client retention, product to service ratio, individual revenue etc.
But it’s also important to take the time to look at the story these numbers tell in reality and put them into context.
For instance, if you’re fully booked 4 weeks ahead, looking your average visitation rate KPI will be very different to if you’re desperately needing new clients to fill the books... So a number is one;y witrth the context it’s put in...
Competence and your product.
Another really prevalent thing I see is that many don’t actually see the full value of what they offer….
“Are we good enough to charge these prices?”
“Do we deliver?”
“Will people pay?”
“I don’t think they can afford it so I’ll give a discount…. “
“Are we really as good as we think we say we are?"
It’s pretty damn hard to back yourself if you’re not confident in the value you offer. So the only way out is to continuously educate yourself and your team. Learn more about how you can improve. Constantly keep evolving, learning and improving.
The more competent your team is, the more confident both they and you feel feel in what you have to offer the world.
I subscribe to the notion that people can increase their competence, and therefore confidence, by taking action in the areas they want to improve - learning from feedback, seeking out the tools they need, and surrounding themselves with people who inspire and support them. Like mentors and coaches. And positive entrepreneurial influences.
And if you don’t feel confident that your offer is strong enough - start improvement processes! Look for any areas of improvement with a fine tooth comb. Invite different demographics, collect client feedback - then tweak until you get it right.
By building your competence you can grow your confidence - so you can turn things around and gain a positive money mindset;
- Grow your competence in your abilities and your opportunities by growing your financial knowledge, experience and skills
- Use your competence as a fuel to grow your confidence by gaining a better understanding of personal finance, investing, budgeting, and other financial concepts. When you do, you can develop a sense of mastery and competence in their financial lives. This in turn can lead to an increase in confidence in your ability to manage money and make sound financial decisions.
- Remember, data is key. So if you don’t know if your clients feel you’re worth it, do a survey! And if they don’t think you are, at least you know the simple way to change this is by re examining your offering! Re examine your feedback to see where the gaps are. What an absolute bloody gift!
- Learn your numbers…. It’s not just the daily revenue - because you may not have any cashflow even thought you’re a million dollar business. Means nothing. Know your net profit, your wage % and your cogs. Know your team’s weekly performance and the story behind them. Ask questions so you know your team’s challenges. Ask questions to work together to find a solution to them. Know your break even. Knowledge is power. If it’s not good news I promise you’ll be more empowered and committed to making a change once you know!
- Do daily reflections. Ask yourself “Is this really true that this client can’t afford $400 for a facial?” “How do I know?” People have the opportunity to choose when they book you. If they book, they know how much it is. And if people don’t book, then you know you have work to do on your offering to make sure you’re speaking to your target audience.
2. Overwhelm and Money Mindset:
Fact: when you’re in a state of overwhelm your brain retreats to its lizard brain. It literally shuts down any creative, solutions driven thinking to preserve every to handle the stress.
it’s therefore also physically impossible to look for opportunities. Impossible. So what you end up with is a negative money mindset;
“These opportunities aren’t available to me”.
“I can’t find my way out of this”.
“I can’t change my situation”
To combat overwhelm, try these tips:
- Start the morning off with breathing exercises to re balance the brain and move from fight or flight to a more opportunistic, expansive brain function (again, based in science...)
- Force yourself to celebrate the little wins every day. Even things like “I took time out for me today and went for a walk”. Or “I had a difficult conversation that I really didn’t want to have”. There is a LOT of research out there that has found that celebrating wins daily and consistently leads to higher performance. here’s an article in Harvard Business Review if you don’t want to take my word for it ;) Celebrating wins is about celebrating progress. When things are hard (learning your numbers, hello!), don’t wait till you’re a finance wiz - acknowledge the steps you take on your way there.
- Write a plan. Get clarity over all the things that clog up your mind and things that need to be done - and start breaking them up into small actions that will keep you moving. Each time you complete a task, celebrate!
- Practice gratitude and reflect on your day - what worked well? What are you grateful for? What will you take the opportunity to improve upon tomorrow? FunFact: based on several Harvard University studies, people who regularly reflect on their mistakes and how they can improve are proven to be more productive and high performing than people who don’t. In fact, in one study, they showed that introducing a 15 minute reflection at the end of each day improved productivity by 23% in only 10 days! Reflections also happens to be one of the foundations and tools used in developing a growth mindset...
3. Growth Mindset and Money Mindset:
Growth mindset is the belief and matching behaviours that where you are today - your current skills - is only a starting point. That work concerted effort, hard work, grit and determination, you WILL get better at things and overcome challenges standing in your way. People often confuse having a growth mindset with “having a positive attitude”.
Having a growth mindset does NOT mean you have to be positive every day. It does NOT mean thinking “don’t worry things will work itself out” or “if you just stay positive you’ll be ok”.
In fact, that kind of thinking can often work against you and set you up for failure. Which will accelerate a negative money mindset and actually become a self fulfilling prophecy!
No, having a growth mindset means looking at challenges that come your way, acknowledging that they are challenging, then looking for ways to solve them instead of thinking “I’m just not good at this so I’ll just give up”. It means understanding what’s in your control and focusing on that rather than what’s not.
I remember when I started working with my coach and I asked him “why don’t I just get this leadership stuff?? I think I’m just not a born leader so I should probably get someone else to do that job”.
And he said “Gry, there are 4 year degrees in business management. You’re expecting to be a master without the training. It doesn’t work that way. Leadership, like any other skill, has to be learnt, cultivated and developed”.
I took me at least 2 years before I felt I had some kind of grip on leadership. And another year before it 100% clicked!
Don’t get stuck beating yourself up over the fact that you don’t know your numbers! Take action. Ps! As I’ve mentioned in my email, I am releasing a free mini version of my full financial mastery course for FREE.
I want EVERYONE to have more clarity and more mastery of their money, so this is my gift to you.Stay tuned for that!
So, back to it....tying this concept of growth mindset back to Brendon Burchard's idea that competence and confidence - your money mindset can be improved by focusing on increasing your financial knowledge, skills, and experience. Having a growth mindset means not stressing about the fact that you don’t know everything there is to know about your numbers.
It also means, don’t stick your head in the sand and pretend they’re not there just because you feel like it’s difficult. Everything new is difficult at first. Until you gain the competence and your confidence - and it’s not difficult anymore....
In summary:
By actively working to increase financial knowledge, skills, and experience, setting financial goals that align with your values and passions, learning from feedback and surrounding yourself with people who can inspire and support you, you can absolutely improve your money mindset. This will lead to an increase in competence, which in turn will lead to an increase in confidence in managing your money.
Here are some more practical ways you can do just that:
- BUILD YOUR FINANCIAL COMPETENCE: set financial goals that align with your values and passions, and take action towards achieving them. This can include creating a budget, saving for a specific purchase, or investing in assets such as stocks or real estate. As you achieve these goals, you will become more competent in managing your money which will lead to an increase in confidence.
- DEVELOP A GROWTH MINDSET: learn from feedback, for example, if you made a financial mistake, reflect on it, understand the reason for the mistake, and learn from it. This will help to avoid making the same mistake again in the future, and increase your knowledge and skills. Learn to master your reporting. Get to know the story behind the numbers so you know exactly what the real picture is from week to week. This way your brain won’t try and make up disaster scenarios!
- AVOID OVERWHELM: surrounding yourself with people who inspire and support you can be very helpful. This can include seeking out a coach, mentor, a supportive friend. Practice yoga or meditation. Take time out for you to recover and lead yourself and clear the clutter in your mind that stops you from seeing opportunities and an exciting future.
Would love to hear what resonated, questions, comments... Please leave a comment below. Gry x