Are Your Thoughts Holding You Back? 5 Limiting Mindsets That Sabotage Your Finances
- Davina Jackson
- Oct 13, 2024
- 10 min read
Updated: Oct 20, 2024
Welcome to The Woman CFO – a space crafted just for you, where we embark on a journey of financial empowerment.
Have you ever wondered why it feels like no matter how hard you try, your finances never seem to get where you want them to be?
Well, you're not alone.
For many women, it’s not just about earning more or cutting expenses. It’s about the mindset you have around money.
That’s because your beliefs and attitudes toward money can either propel you toward financial success or quietly hold you back. And the truth is, most of us are unaware of the deep-rooted mental barriers that could be sabotaging our efforts.
In this week’s post, we’re going to discuss five common mindsets that could be the reason why you're feeling stuck financially.
From scarcity thinking to fear of taking risks, we’ll break down how these mental blocks work and - more importantly - how you can overcome them.
By shifting your mindset, you’ll be better equipped to set goals, manage your finances, and achieve long-term financial security.
After all, your mindset is the foundation on which financial freedom is built.
Are you ready to dive in? Let’s get into it!
Key Points
Your mindset can have a significant impact on how you manage your finances
Common financial mindsets include scarcity, lack of confidence, procrastination, comparison, and fear of risk
Shifting these mindsets can lead to better financial decisions and long-term stability
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Mindset #1: Scarcity Mindset
Mindset plays a significant role in your financial success, but how much? Let’s start with one of the most common barriers: the scarcity mindset.
A scarcity mindset is the belief that there is never enough - whether it’s money, opportunities, or resources.
If you've ever found yourself thinking, “I’ll never have enough to save” or “There’s just not enough money for me to invest,” you might be operating from a scarcity mindset.
This way of thinking can cause you to hold onto your money too tightly, avoiding
opportunities to grow it, or prevent you from even starting a financial plan because it feels pointless.
In other words, scarcity thinking keeps you in survival mode, always worrying about how to make ends meet rather than planning for a secure future.
You start playing small and avoiding risks, even those that could lead to major financial gains, because the fear of losing money is overwhelming.
The irony is, even when you do have enough, this mindset can lead to poor financial decisions like missing out on investments or savings that could have compounded over time.
Women, in particular, may struggle with this mindset due to societal pressures and the wage gap, making the fear of not having enough more pronounced.
The good news? You can shift from a scarcity mindset to one of abundance, where you trust that opportunities are available and that with proper planning, you can thrive.
How to Fix a Scarcity Mindset
To overcome the scarcity mindset, it's crucial to shift toward an abundance mindset.
This doesn’t mean ignoring your financial realities but instead recognizing that there are always opportunities to improve and grow.
Start by changing the narrative in your mind. Instead of focusing on what you lack, focus on what you already have and how you can use it wisely to grow.
Then, set small, achievable financial goals like saving a modest amount each month. And celebrate those wins, no matter how small they seem.
As your confidence builds, you’ll begin to see that there is always enough. It just takes a strategic approach to manage it well.
Also, don’t forget the importance of surrounding yourself with positive financial information - whether it's books, podcasts, or conversations with people who manage their money well.
These positive influences can help retrain your brain to see possibility rather than limitation.
By letting go of the fear that there’s never enough, you'll open yourself up to opportunities to grow your wealth and move toward financial security.
So, take a deep breath, and start believing in the possibility of more. You have the power to change your financial future.
Mindset #2: “I’m Not Good with Money” Mindset
How many times have you heard someone say, “I’m just not good with money”?
Or, maybe you’ve even said it yourself.
This mindset can be a huge roadblock to financial success because when you believe you're inherently bad with money, it becomes easy to avoid learning about finances altogether.
The truth is, no one is born knowing how to manage money. Like any skill, financial literacy can be learned and developed over time.
For many women, this mindset may stem from societal conditioning or lack of financial education.
Historically, women haven’t always been encouraged to take control of their finances, leading to feelings of inadequacy when it comes to managing money. Or, they’ve had negative financial experiences that left them feeling inadequate.
But here’s the thing: believing you're "not good with money" can limit your financial potential and become a self-fulfilling prophecy.
If you believe you’re bad with money, you're less likely to take control of your financial future - shying away from budgeting, investing, asking questions, or even learning the basics of personal finance. All of which keeps you stuck in a cycle of financial confusion.
The good news? You don’t have to stay in that mindset.
How to Fix an “I’m Not Good with Money” Mindset
The first step to overcoming the “I’m not good with money” mindset is acknowledging that you don’t need to be a financial expert to manage your finances successfully.
Next, understand that you can get better with money.
Start by educating yourself - whether it’s reading personal finance blogs, listening to podcasts, or seeking advice from a financial coach.
The key is knowledge. The more you learn, the more you’ll practice, and you’ll start feeling more confident.
These small, manageable steps towards understanding your finances can lead to big changes in your overall money confidence.
Remember, money management is a skill, not a talent. No one has it all figured out from the start.
Shifting your mindset from “I’m bad with money” to a growth mindset where you can learn and improve, will empower you to take control of your financial life, making better decisions that lead to financial growth and stability
The important thing is to start where you are, and over time, you’ll realize that managing money is something you can do - and do well.
Mindset #3: “I’ll Start Saving Later” Mindset
A mindset that often holds people back from achieving financial success is the idea that saving can wait until “later.”
Whether it's waiting for a raise, the end of student loan payments, or when life's expenses settle down, pushing off saving for the future can be one of the biggest financial mistakes you make.
The problem with this mindset is that “later” tends to turn into much later or (often) never.
It's easy to fall into the trap of thinking you'll save more effectively when life becomes less hectic or when you have more disposable income.
Life is full of unexpected expenses, and if you’re constantly waiting for the “perfect” time to save, you might miss out on years of potential growth for your money.
By delaying saving, you miss out on one of the most powerful financial tools in building wealth - compound interest.
Think of saving as planting seeds. Starting early, even with small amounts, gives your money more time to grow and work for you. The longer your money stays invested or saved, the bigger the growth potential.
The key is consistency. You don’t need a large sum to get started because even small contributions add up over time. You can always increase your savings rate as your income grows, but don’t wait for a magical future moment to get started.
How to Fix an “I’ll Start Later” Mindset
If you find yourself saying, “I’ll save later,” it’s time to shift your mindset.
Start by automating savings. Set up a small percentage of your income to go directly into a savings or retirement account.
Once saving becomes a regular part of your financial routine, you can start increasing the amount you put into your savings. You'll be surprised how quickly it adds up and how much less stressful it feels.
By taking action today, you’re investing in your future self and avoiding the regret that often comes with putting things off.
Mindset #4: Comparing Yourself to Others
In today’s social media-driven world, it’s easy to look at what your friends, family, or influencers are doing with their money and feel like you’re falling behind.
Whether it’s seeing someone post about buying a new car, going on luxury vacations, or making big purchases, comparison can quickly derail your financial goals and make you feel inadequate or as if you’re falling behind.
The danger of this mindset is that it creates a sense of pressure and encourages impulsive spending that distracts you from your own financial journey. Even financial distress.
Everyone’s financial situation is different.
Factors such as income, expenses, goals, and responsibilities vary from person to person. What you may not see behind the scenes are the full details of someone else’s financial situation. They may have debt, or they might be living paycheck to paycheck.
So, instead of assuming that everyone else is doing better than you, focus on your unique goals and situations that are based on your values, needs, and aspirations - not someone’s Instagram feed or TikTok.
How to Fix a Comparison Mindset
Everyone’s financial journey is different. What works for someone else may not work for you, and that’s okay.
If you start comparing yourself to others, take a big step back, breathe, and focus on the long term.
Keep your eyes on your own path, set clear financial goals, and work toward them with intention.
Remember that personal finance is just that - personal - and focusing on your own goals is the best way to stay on track.
You’ll find more fulfillment in your journey and avoid unnecessary financial stress.
Mindset #5: Fear of Taking Risks
Let’s talk about the mindset that can hold you back from financial growth: the fear of taking risks.
Whether it’s investing your money, starting a side hustle, or making big financial decisions, the fear of uncertainty can keep you stuck in the same spot, preventing growth.
For many, financial risk is associated with losing money or making a mistake. While that’s a possibility, avoiding all risk comes with its own set of downsides.
Without taking calculated risks, you miss out on potential opportunities to grow your wealth. For example, sticking all your money in a low-interest savings account might feel “safe,” but you’re actually losing purchasing power over time due to inflation.
And when it comes to your finances, there’s a fine line between being cautious and letting fear control your decisions.
Avoiding risk entirely may keep you from maximizing your savings, investing wisely, or even negotiating for a higher salary. But, taking risks doesn’t mean being reckless.
Taking risks means assessing the potential reward versus the possible downsides and making informed decisions.
So, for instance, when it comes to investing, you would balance your portfolio with a mix of high-risk and low-risk investments to help you manage uncertainty while still aiming for long-term growth.
How to Fix a Fear of Taking Risks Mindset
The truth is, no financial strategy comes without some level of risk, but the key is learning how to manage it rather than run from it.
Start by educating yourself. The more you understand about the market, investment strategies, and personal finance, the more confident you’ll feel in making decisions that push you toward your financial goals.
For example, investing in the stock market might feel intimidating because it fluctuates, but historically, long-term investments have yielded higher returns compared to leaving your money in a savings account. Similarly, taking calculated risks—like switching jobs for a better opportunity or investing in personal growth—can pay off in the long run.
The key is not to eliminate risk but to educate yourself and make informed decisions.
You don’t have to start big. Start by taking small, manageable risks, like contributing to your retirement account or exploring a new income stream.
And don’t be afraid to seek professional advice when needed.
Remember, at the end of the day, calculated risks are a part of any successful financial strategy.
Embracing them can open doors to new opportunities and set you up for long-term financial growth.
Limiting Mindsets That Sabotage Your Finances: Shifting Your Mindset to Unlock Financial Success
Now that we’ve explored the fear of taking risks, let’s wrap up with the big picture.
These five limiting mindsets that sabotage your finances : scarcity, feeling incapable with money, procrastination, comparison, and risk aversion - can easily become roadblocks on your path to financial success.
But here’s the good news: just like you can get out of debt or build wealth over time, you can also shift your mindset with intentionality and action.
When you recognize these limiting beliefs in yourself, it’s not a signal to give up. It’s a signal to make changes, and each of these mindsets can be replaced with healthier, more productive financial habits.
For example, instead of holding onto a scarcity mindset, you can adopt an abundance mindset that focuses on long-term growth. Or, rather than saying, "I’m not good with money," start small and build your financial confidence. And when you face the fear of risk, remember that calculated risks are essential to moving your financial journey forward.
The key takeaway? Your mindset directly impacts your financial well-being.
By shifting these mental blocks and adopting positive, growth-oriented habits, you can truly get your finances on track.
You have the power to rewrite your financial story - one step, one belief, and one action at a time. Whether it’s creating a budget, opening a savings account, or learning more about investing, every effort counts.
And as you move forward, stay mindful of the thoughts that guide your actions, and you’ll be well on your way to financial freedom.
Taking control of your finances is not a one-time event but a journey that requires consistent effort and guidance.
That’s where The Woman CFO comes in.
Our coaching programs are specifically designed to help women like you break through these mental barriers and create personalized strategies that work for your financial situation.
If you're ready to take the next step, The Woman CFO's financial coaching programs are available now to guide you through transforming your mindset, building wealth, and achieving financial independence.
Book a free consultation today and learn how our coaching programs can empower you to reach your financial goals!
