Applying A Growth Mindset To Personal Finance (infographic)

Most people have regrets when it comes to their finances. Some people think back to all the credit card debt they racked up in college and realize the interest payments alone added up to a down payment on a house. Others look at a long line of fancy cars they’ve purchased and realize they could have gotten from point A to point B a lot cheaper. Unfortunately many people don’t realize the detrimental effects of their frivolous spending until they reach retirement age and they just aren’t physically capable of sustaining their lifestyle anymore. Choosing to look at your financial situation from a growth mindset can help get you on track to a better future.

More than 75% of Americans have at least one financial regret. More than half of people regret not saving more, and the things they are underfunding include retirement savings, college funds for their kids, and even emergency funds. We’ve all heard it said that the majority of people aren’t prepared for a $400 emergency, but that doesn’t mean we can’t turn things around.

A growth mindset applies to many different deficiencies in financial literacy. The biggest change you can make for your finances is to know what your skills are worth in the marketplace and ask to be paid what you are worth. Most people significantly undervalue their own skills, and knowing what you are worth and getting paid that amount can help you make major strides toward a better financial future.

But even if you are already getting paid what you are worth, there are changes you can make using a growth mindset that can place you in a stronger financial position sooner than you think. Start by understanding that it’s ok to not know something and it’s perfectly fine to seek out new information. Most people are embarrassed that they haven’t learned basic financial literacy from their parents, and it often prevents them from being able to learn the right way to handle their finances.

If you have debts, all is not lost. There are two methods for paying off debt. The first one is the snowball method, in which you pay off your smallest debt first and build to paying off your largest debt. The second is the avalanche method, in which you pay off your highest interest rate debt first and then go from there.

As you pay off debts, you will free up more of your money to start to save enough for your emergency fund and retirement. Aim to save at least 10% of your earnings and work your way up from there. The more you save, the better off you will be in the future.

Even low earners are able to save a portion of their earnings instead of living paycheck to paycheck - it’s estimated that 30% of low income earners can save. Avoid late payments, which come with penalties - as the old saying goes, it’s expensive to be poor. Understand the risks that come along with borrowing and other forms of debt and make wise decisions. Always try to learn new things about finances and keep up with new trends and economic developments. While something may have worked for your grandparents it may now be obsolete.

If you have always considered yourself to be “bad with money” that doesn’t mean you have to continue to be that way forever. It is possible to learn financial skills as you get older that can serve you for decades to come. Learn more about having a growth mindset for your finances from the infographic below. You might be surprised how well off you could be a year from now!

Maximize Your Money With A Growth Mindset - infographic

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