Understanding Your Financial Belief System

Henry Ford once said, “Whether you think you can or you think you can’t — you’re right.” This observation speaks to the power of belief.

A belief system is a set of principles and ideologies that we use to interpret our everyday lives and reality. Like any belief system, financial beliefs are instilled over time and are shaped by a lifetime of experiences, so it can be challenging to step back and examine these beliefs objectively.

If you believe money is the only thing people care about, then if someone questions you about that belief, your initial reaction will almost always be something like, “This isn’t a belief; this is a true reflection of reality.”

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But is it? 

Is your belief about money a factual representation, or is it a perspective you learned in the past that might no longer serve you? I maintain that if you go about life with a scarcity mindset, no matter how much money you have or make, you will still believe you don’t have enough. Whereas if you have an abundance mindset, no matter how little you have, you will believe there is an opportunity to earn more. If we can disconnect from our past beliefs and assess our current situation with a certain level of objectivity, we can ultimately make more appropriate decisions for our current and future situations and contexts.

Here are four ways to look at your financial belief system more objectively.

1. Family history

Look back at how your parents and immediate family felt about finances when you were growing up at home. Were expenses and money a topic of conversation? Did anyone argue about money? Did you believe you were poor? Did you believe you were rich? Do you still feel that way?

2. Personal perspective

How do you feel about money? What does money mean to you? Is it evil? Do you love it? Is it something you value highly or something that has little value to you, or is it just a means to an end?

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3. Expenses vs values

Take a look at everything you’ve spent money on over the last two weeks. Compare these expenses to your values. Are you spending money on the things that you truly value, be it family time, charity, business growth or travel, or are you dedicating money to things that aren’t relevant to your values?

4. Future goals

Our goals for the future always have a financial component. You might want to live a certain way, retire at a certain age, travel or buy a home. Have you clearly identified what you want your future to look like?

These four questions should help you better understand your past and current beliefs about money. You are your financial future, so if your financial beliefs or actions are not helping you to attain your dreams and desires, it might be time to question your beliefs and if they are actually true or need adjusting.

Because, as Ford suggested, whether you think you are poor or think you are rich, you are right.

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