Resetting your Money Mindset after a Major Negative Life Event
When financial catastrophe strikes, it can disempower you and your money. Shift your thinking with these practical tips.
Separation or divorce. Illness. Death of a loved one. Bankruptcy. Failed business. Job loss. Pandemic. Retooling for an entirely new career. A major unexpected expense. What’s common amongst these is heartache and financial set-back, so it’s no wonder that people experiencing such negative life events feel disempowered, and are likely to struggle with feelings of anxiety and depression. For most people in these circumstances, it can feel like their money is controlling them, and not the other way around. But, there's a light at the end of this tunnel. And it starts with shifting your money mindset.
Your money mindset is what you think and believe about money; how much you have, what that says about you, how you manage it, your feelings about the way other people manage their money, how much they have, and so on. If you’re in need of a reset, and to shift your money mindset into a healthy place, we recommend you adopt the following practices.
Stop comparing yourself to others
This is an incredibly difficult task considering our social media culture. But, it’s essential when you’re resetting. Start by keeping a tally (on a post-it note is fine) of how many times a day you check social media and find yourself comparing. We like the new screen time notifications that most phones offer where you can easily track how much screen time is spent on social media. Next, aim to cut back the comparisons by 10 per cent each week. One of the easiest ways to do this is to put down your phone and stop scrolling social media as frequently. Instead, fill that time with a healthy activity such as learning a new recipe, making a smoothie, or playing your favourite sport.
Know your money truth
Hiding from your financial reality will not help the situation. You’ve got to face your financial truth square on. How much do you owe? Where is your money located? Etc. This may require the help of a financial advisor or money coach, but in short order, the truth will begin to shift power back into your hands.
Adopt a new healthy financial habit every week
Pay attention to financial habits that bring you stress, and those that bring you joy. It can help to keep a written journal of these habits; when they happen, and how they make you feel. For those that are stressful, like going to the mall and overspending on clothes, try to identify the urge as it’s brewing, then fill that urge with a healthy new habit. Here’s a few to choose from:
Check your online banking daily
Move a small amount of money into your savings account every day (we call this practice Daily Saving)
Pack your lunches and coffee
Create a grocery shopping list based on a meal plan
Read a book on saving money
Meet up with a money mentor every week or month
Make a plan for your spending for the week ahead
When you’re resetting your money mindset, it can be hard to think ahead too far. So, we recommend that every Sunday, before the work week begins, you sit down and plan out how you want your week to go. What would you like to do, how much will it cost, how will you pay for it, etc. This is the first step in a more comprehensive budgeting process, and eventually you’ll start planning a month or two in advance.
Don’t beat yourself up
When you’re resetting, it’s not the time to hurl criticisms at yourself for past mistakes. You’re already in a tough spot and negative self talk will only make it worse. Rather, pat yourself on the back each and every time you do something small, but smart, such as remembering to pay a bill on time. It’s hard to change a mindset overnight. Trying to solve all of the issues you're struggling with at once will feel like an impossible mountain to climb. So, take comfort in the fact that small healthy financial steps will create the momentum that you’ll need to overhaul your money mindset, and grow your financial self-esteem over time. Be patient with yourself, and don’t be afraid to reach out for support via a therapist, a money coach or a friend.
Try using our handy checklist to help you reset your money mindset.