Mindset is key to making progress in every area of our lives, including our money. Because of the way we’re socialized, many people tend to have a fixed mindset around money, which leads to undesired results.
In this episode, we dive into some of the characteristics of a fixed mindset vs. a growth mindset and how each plays out in relation to our money.
Lightly edited transcript appears after the show notes.
Topics Discussed
- characteristics of a fixed mindset
- characteristics of a growth mindset
- why having a growth mindset leads to progress with our money
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Lightly Edited Transcript
Hey friend. How are you, I hope you are doing well, that you’ve had an amazing week, and are gearing up for a wonderful weekend. Today I want to talk about the mindset that will help you make the changes you want to see in your money and your life. We know that our mindset is the key to everything. Right, like I’ve told you that your thoughts create your ultimate results. And this is especially true in connection with our money. Many people have a very fixed mindset when it comes to money, and it’s keeping, so many of us stuck in the same place and not seeing the results we want to see. So, I’m sure you’ve probably heard of the fixed mindset and the growth mindset before, but if you haven’t, these terms come from Carol Dweck She’s a psychologist, and she has studied mindset extensively, and she says that people fall into two buckets, when it comes to their mindset. So, either you have a fixed mindset or a growth mindset, and each one has a different effect on the way we perceive our abilities, and the challenges we face and failure, and our capacity to change and all that. So I want to talk about how these two mindsets relate to money, specifically, but just know that you can substitute, like, just about any other area of your life here. So let’s look first at the characteristics of a fixed mindset. So people with a fixed mindset, first of all believe that their knowledge and skills, and abilities are just innate, it’s just, you know whatever you were born with, and having to put in effort to do something, or you know not getting something right the first time means like I’m just not good at this thing. And so many people look at money this way, where they believe that either they’re good with money, or they’re not good with money, like some people are just born good with money, and others aren’t. And instead of looking at money as something that you can learn more about and learn how to manage it better, we just write it off as I’m just not good with that so I’m not going to worry about it. The second characteristic of people with a fixed mindset is not believing that it’s possible to change. So people with a fixed mindset believe that having to put effort in means they’re not good at a particular thing, but then they also believe that any effort is pointless anyway because they can’t change on the money front, this can show up where people keep doing the same things over and over on autopilot, that aren’t leading to the results they want. And if you don’t believe that it’s possible to change, then why would you try to change right how are you going to show up. If you don’t think that your efforts are worth anything. You know you’re not really going to be motivated to look at your budget or your spending, or whatever, and figure out how to improve. If you don’t think that anything that you can do with change it. Third, if you have a fixed mindset you avoid challenges. So, people with a fixed mindset fear failure. They don’t want to look like they don’t know what they’re doing right they want to look smart. They don’t want to make mistakes, they don’t want to ask for help. They don’t want to take risks, failure means something about them personally, like, from the standpoint of the fixed mindset. If your intelligence and your skills and such, you’re just set at birth. If I fail at this thing, then it means I’m not smart, right if I tried a budget and it doesn’t work out the way I want to and I go over budget, then I failed and I’m just not meant to budget, and it might not even be challenges related to actual money skills. Okay, could be just the challenge of talking to a spouse or significant other about money, things aren’t working, but I don’t want to rock the boat so I’m not gonna say anything because I don’t want to feel uncomfortable. But if we don’t address things that aren’t working, then there’s no way that we’re going to fix them, right. The fourth characteristic is they tend to blame negative results on things outside of themselves. So it’s not that I didn’t do the work, or I didn’t put in enough effort to get a different result. It’s that I just don’t make enough, or the cost of living in my city is too high, or my debt payment is too big or whatever. And that’s not to say that those circumstances, don’t exist, or can’t exist, but people with a fixed mindset, would just accept the circumstances and never even consider whether there’s something they could do to turn the situation around, because remember that effort wouldn’t change anything anyway. Right. And that goes back to something we’ve talked about before, where the circumstance of their salary or the cost of living in their city or the debt payment is neutral, but their thoughts about their circumstances are what’s leading to the result they have people with a fixed mindset also often discount the success of others. And that looks like statements like well yeah I could do that too if I had, you know, insert whatever special snowflake circumstance, right, if I had that job or that spouse or that degree, but something that I heard once that has always stuck with me is there’s always someone dealing with the same circumstances as you who figured it out anyway. So it’s not because of your circumstances, right, like we talked about the salary are the cost of living in the city. It’s not that those circumstances are causing you not to be able to do the things that you want to do, because there’s someone else who has that same salary or the same cost of living or whatever, and they’re still figuring it out. You might notice that some of the characteristics of a fixed mindset, pop up for many lawyers often especially as related to making mistakes and taking risks and things like that. But having a fixed mindset will keep you from making progress with your money. You’ll stay in the same place still talking about paying off that debt or still trying to save X amount, and still spinning your wheels and not moving forward. So, if you relate or if these fixed mindset characteristics resonate with you. I want you to keep listening. So looking at the other side the growth mindset. The first characteristic if you have a growth mindset is you believe that you can learn. You can learn the skills that you need to manage your money. You can learn how to create a plan for your money and stick to it and not overspend right how to pay off debt, how to invest, how to build wealth. It’s not just set in stone. You aren’t just bad with money and destined to not reach the results you want, you can learn how to do something different. The second characteristic is, you believe that your efforts will work. So if I take steps. These things will change my effort will make a difference, and that makes sense, right, like you’re not going to feel motivated to make changes in your finances. If you don’t believe that it’s going to make a difference. Like if I do something, it doesn’t work anyway so what’s the point. But when you believe that the more I work toward doing better with my money managing my money, the better. I’m going to do, then you’re much more motivated to actually do the work. The third characteristic is. People with a growth mindset, embrace challenges. So mistakes and failure are just part of the process, you know you’re learning something new you will inevitably make mistakes, and I want to offer that that goes for your practice too. Even if senior attorneys make it seem like they never made mistakes they did. But when you make a mistake, you can evaluate, and you can try something different. And you learn from it. So going back to the money example let’s say that you make your plan for how you’re going to spend and then you go over in some areas. When that happens, then you can say okay, why didn’t that work right maybe the budget wasn’t realistic or maybe I didn’t plan for these unexpected expenses, or whatever it is, and you’ve got a baseline for moving forward. But when things don’t work out. So when things don’t work out you can evaluate and improve, but you can’t improve if you never get started. The fourth characteristic is. People with a growth mindset are inspired by the success of others. So instead of seeing all the reasons why this person was able to do it but I don’t have the special thing that they have and whatever else, then you look at what they’ve done as an example of what’s possible for you, and you believe that it’s possible for you to do it too, because you can learn from their experiences. So having a growth mindset means we’re open to learning and trying new things and failing forward, and many of us have a fixed mindset, Because of the way we’ve been socialized around money. And then our training as lawyers to avoid mistakes and risks and all the things, but if you want to improve your money. You want to manage it better. You want to hit your goals, and all of that, then you want to have a growth mindset, and you want to be open to learning. You want to be willing to make mistakes, and evaluate and tweak and improve. You want to not see yourself as the special snowflake, and see how the things that other people are accomplishing are possible for you too. And if you need help with this, then you want to work on your money mindset, and finally see progress in your money, I can help. So head to rho Thomas comm slash coaching, let’s set up a call and we can get you on the right track. All right, so join me over in the wealthiest community on Facebook. Let’s chat more about the fixed mindset versus the growth mindset, and how we can apply that with managing our money. You can find us at rho Thomas comm slash community. If you got value from today’s show, please share it with a friend. If you share on social media, or if you just want to connect my handle is at I am rho Thomas and I am on Instagram, and LinkedIn. Please subscribe to this show on whatever platform you’re listening on leave a rating and review that helps the show to get in front of more people and helps us to spread this message. Okay, friend, as we close out, I pray that you will consider how you think about your money, and whether you need to make changes there. I pray that you will start learning new things, implementing them, evaluating, and failing forward. And as always, I pray that you continue to take steps to regain control of your time, build wealth and live the life of freedom and choice, you deserve. Talk to you later.
Hi, I’m Rho! I’m a wife, mom, and Biglaw associate who believes that true wealth is having control of your time. I help busy lawyers like you take back control of your time by teaching you how to achieve lifestyle freedom through mindset shifts and financial independence. Read a little more about me here.
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