3 Steps to Changing Your Money Mindset

And How to Stop Being Broke

Chances are, you could have at least $300 more this month than you think you do! Are you like most people? Did the holidays have you spending loads of money on gifts and celebrating? Many people are only able to do this by going further into debt. But, the new year or anytime of the year, can help to inspire you a bit to focus more on avoiding debt; so it’s time to update your money mindset.

Here’s some ideas to help you start working on your debt this month, by finding several hundred dollars in your current income stream, that you are wasting. Read on to learn more.

Please note that there are some affiliate links in this post, which just means you’re helping to support this blog, at no extra cost to you, by helping me earn a little commission.

Just Start Where You Are

There really is no good reason to go overboard and put yourself deeper in debt during the holidays, for birthdays, or on most things really. Trust me, I’ve done it and it does not yield a return on your investment, in dollars or in your conscience.

Consider this, if your loved ones knew how miserable you’d be the rest of the year, because you spent so much on gifts for them, do you think they’d really want you to do that on their behalf? I’m gonna guess “no,” most would not want that.

And, since New Year’s resolutions are here- wouldn’t it be nice to start this year not already feeling guilty about spending so much? If you did spend too much, it’s still a good time now to get back on track. Or course if you’re reading this later in the year, it’s still always a good time to start making money changes.

The Washington Post cites that about 40-45% of Americans make at least one resolution every year. Our top goals collectively are to (1) stop smoking, (2) lose weight, and (3) pay off debt. Not so surprising right?

Surprising though, is that according to MagnifyMoney, last year over 44% of those surveyed said they’d increased their debt by $1,000 or more last Christmas. 

Even more interesting is that at least 10% of those people said they’d only be able to make the minimum payment of $25 toward that debt going forward. That means they’re still going to be paying off debt from Christmas 2017, until 2023!!!

That sounds crazy right? Who would do that? Well, turns out MANY people do that, and may not even realize that’s what they are doing to themselves.

Successful Resolutions 

What’s on your list to accomplish for 2019? For 2020? Is getting out of debt one of your perennial goals? Is it one that seems to end up on your list every year?

If so, before you shop or buy anything again, I encourage you to start thinking about your finances right now- before you pull out your credit or debit card again.

Do you want to make this the same as every year, where you became more in debt? Or is this the year where you start to get out?

I know it can be scary to think about, and even scarier to actually face. It’s much easier to go on with your life and try not to think about it, right? Just keep “getting by.” But is it really easier?

Just for a moment, consider getting yourself into a stable position financially. Can you imagine it? You have money in a savings account for an unexpected car repair or dentist appointment. Or, you still have money in your account by the time your next paycheck rolls in. You don’t have that tight, sort of on edge feeling in your chest all the time, not knowing how you’re going to pay all your bills this month. Or you don’t have to constantly thinking about the mountain of debt you have that you think you’ll never climb over.

I’m telling you, getting to that place, it can truly be life altering! This is how you change your money mindset. And as I like to say- if you put it off until later…well you know… later means never!

So, I want to challenge you to make this the year that you finally face your money fears, take a real, hard look at yourself and your spending habits.

Start taking at least some small steps to get out of debt every month, and get to the life that you really want to live.

Because, “I love being in debt”, said no one ever.

If you’re up for the challenge, I want to help show you that you can make some small changes– like today– that can help you start to improve right now.

How do I know these steps work? Because I’ve been doing them for myself for the past year- and it is working!!

I’ve already paid off over 35% of my total debt in the past year, as I’ve put these practices into place.

Imagine the feeling you’d have today, if you had no debt to worry about? The freedom that would afford you?

Own Your Life

I haven’t owned my own life for at least the past 15 years.

Even though I’ve been working to get out of debt for a LONG time. Yet, even after working so hard,  for so long, I just could not seem to “move the needle” on my debt.

And I have felt like a slave: to credit card companies, to my employers, to cars that I don’t want, and to all the stuff I bought.

To try to pay it off, I’ve even worked multiple jobs at a time, borrowed from my family, used payday loans, pawned things, and was generally a total hot mess. 

But, putting SO much money toward my debt should have helped me, right? So why did I fail over and over?

I was still thinking about money all wrong. I had not changed my mindset about the hard truth of what it would take to get out of debt AND stay out of debt.

And even though I felt like a slave, I had not admitted to myself that I didn’t own my own life. Because that’s truly what debt does to you. It keeps you shackled to places and jobs and things you can’t escape from.

Debt keeps you from the freedom to live your life on your terms. Doesn’t that just suck to think about??

Well, guess what? I decided I was sick and tired of slaving away for someone else. And, I decided to do whatever it’s going to take to get free! Literally whatever it takes.

If that’s what you want too, even if you’re not ready to start it today, immediately, I’m going to tell you about the steps I took, and why and how it’s finally working after so long.

Step 1—Change Your Mindset

Without even realizing it, over the years I had settled into a mindset that so many people also have and don’t know either.

It’s the mindset that you can still live your comfy, cozy life, privileged life, with all the conveniences you’re used to having… AND still get out of debt.

That is a lie!

I’m sorry to be the one to break it to you, but you cannot have your cake and eat it too. No matter how much you’d like that! It just won’t work.

The error is thinking that you have any “extra” money while you’re still in debt is just a lie. Because honestly, until you get out of debt, none of your money is extra.

Let’s really think about that—NONE of your money is extra. (Mind you, I am not talking about a mortgage in this case) It’s not extra– because all of “your” money is still currently owed to someone else. It’s essentially NOT yours.

I know that’s harsh, but it’s the truth, and the truth can be hard sometimes.

If you decide to get out of debt and be free of that burden, you first have to acknowledge something to yourself–> you cannot keep living your life at the same “standard” that you have been living. At least for now.

While you are getting out of debt, you will need to have a more singular focus about your spending.

It will be the new normal to feel a little uncomfortable. So you’ll continually need to remind yourself that it’s okay to feel uncomfortable!

After all, that is how growth happens. Challenges, sacrifice, learning- they can definitely be painful to go through. But, true growth is only achieved when we get to the other side of that hard or difficult struggle or trial.

The growth comes when we overcome! And that is when you also become stronger, steady, and free. So, remember, it will probably be hard—but it should be temporary.

That’s how you have to get through it- remind yourself that it is temporary. And once the debt is paid off (my goal date is July 2020), the possibilities for your life and standard of living, well… then they become whatever you want!

Changing my mindset has obviously taken me a long time.

My husband is my biggest supporter by far, he has helped me so much with this step. He took these same steps years ago and got himself out of debt too.

He patiently waited for years and tried in so many ways to help me learn about changing my mindset, as he had changed his. But I’m stubborn, and I thought I could still live life as I was accustomed to.

Stuck in the “Deserving” Cycle

When you are stuck in the cycle of debt it’s also hard to see that there is any other way to live.

You are constantly stressed about not having enough money. You’re always worried that you’re just one emergency away from your finances totally crumbling.

I totally, 100% get that. You can feel trapped and ashamed, and you can just try to ignore the truth. But besides your family’s and your health and welfare, money problems can be one of the most stressful issues we face in our entire lives.

It is largely cited as one of the top 2 issues that couples fight about. It’s also listed as one of the top 15 reasons that people commit suicide.

(If you are having any of these thoughts, please call the National Suicide Prevention Hotline toll free at 1-800-273-8255.)

In other words, it can be a very serious issue.

One of the biggest challenges I see that needs to change, is to overcome the mindset of “I deserve it now!”

This can happen when you’ve gone for a time without spending, of after other things in your life become stressful or unmanageable.

You can start to become influenced by commercialism, and by other people, and it’s easy to lose your willpower. Then you start going down what I call the “deserving cycle” or the rabbit hole, and it starts all over again.

We all know that we are literally, constantly being bombarded with advertisements to buy everything. You’re always being told that you should want to have everything. 

That this thing or that thing will make you better or happier. Not to mention, that we “should” buy all these things right now, because we “deserve it!”

I’m going to let you in on a little secret—more lies! Don’t be deceived!

Now, I am not saying that you don’t ever deserve nice things, or deserve to be safe and taken care of. Or that you shouldn’t be able to enjoy what you do have, or be excited about what you are working toward.

But the trick is wanting those things in the RIGHT order and at the RIGHT time!

What does that mean? It means that when you buy something right now, when you can’t afford it, that you’re sacrificing your long term happiness and peace of mind for momentary, and sometimes fleeting pleasure.

And that is not true happiness, is it? That is just a using a crutch or a superficial distraction to help you “get through” whatever crappy thing it is that you’re dealing with in life.

Spending money is just one of those crutches we use, and there are certainly many, many others. I won’t go into all of those here, but I’m sure you can think of a few.

But, are crutches meant for regular, ongoing use? When’s the last time you saw someone on crutches and they said, “Oh yeah, I enjoy using these crutches. I’m happy I’m using them.” Never, right?

I mean, they might be happier than not being able to walk at all. But generally they are meant to help you in the short term, only if really needed.

Let me say that more plainly — those cute shoes you buy today, just because they are on sale and you want to “make yourself happy”, are actually making you miserable.

Why? Because you cannot afford them! If you buy them, you’re choosing to forgo your life’s true goals, just a little more.

You likely do not even need them, and you are adding to your debt and/or not paying off your debt. For something that you may not even care about in a month or two.

But, if you want to be the #BossOfMyOwnLife, if you absolutely want to own your life completely—and truly live with real, financial peace of mind— you’re going to have to stop buying those shoes darling!

Again, at least for now. You’ve got to get to the point where owing someone else does not dictate how you live your life. Which leads us to…

Action Item #1

Your action item for Tip 1 is to print out the FREE downloadable worksheet from the link below— and write in your own “old mindsets” and brainstorm your “new mindsets”.

Once you’ve filled in the chart, keep it somewhere that you can see and read it every day for 30 days. Because habits are formed with repetition!

Step 2—Stop Spending Money on Little Luxuries & Create a Budget

You really have to stop spending money on crap.

Even though everyone is telling you, “You deserve it! Go ahead and buy what you want, when you want it, and do whatever makes you happy!” But, I’m telling you- just stop.

Just flip that notion on its head. Be courageous and try to live life just a little more modestly right now. By so doing, you will be able to be in a much better position to have everything that you really want- when it is REALLY good for you. And that is when you can afford it!!

You may not think it now, but saving a little every day can add up and make a huge difference. How about having an extra $200-300 a month? Would that help toward working to pay off your debt faster?

These are the types of little luxuries I’m talking about –

• That coffee or latte you buy every day on your way to work ($5)
• Eating out for lunch every day ($10)
• Buying takeout to avoid cooking dinner ($10-20)
• Buying “stuff” that you don’t need just because you are already at the store to get something that you do need. (candy/snacks, magazines, beauty products, another dog toy, and etc.)

Okay, just those first 2 things, if you start from there—you could potentially add about $375 more to your “income” again each month—simply by cutting back just during the 5-day work week. ($5 x 25= $125) + ($10 x 25= $250) = $375).

Those things are really NOT making you happy! They are just eating away at the little “extra” you have left in your paycheck—and for what? Momentary pleasure? A caffeine buzz? Convenience?

I bet you’re thinking– “Wait? What? Yes, they do! Those things do make me happy!”

But let me ask you this—do they make up for you also being in constant debt? Is lying in bed at night worrying about how you’ll pay for an unexpected car repair, or doctor bill or any other emergency that comes up, making you happy??

Are you happy that you cannot afford to go on vacation without going into more debt? Or just not going on vacation at all? Are you happy that you can’t buy the car you really want or live where you want?

It’s hard to be happy when you’re constantly being ruled by the parameters that debt puts you in. At least that’s how I have felt.

Debt traps you—and it can make you dislike your work too. (Even if you do enjoy your job!)  Because it makes you feel like you have no choice in the matter. It feels like you are chained to that employer and your minimum payments every month, with no end in sight.

And if you’re like me, you know deep down, that you are never going to be able to have what you really want in life, and feel truly, honestly happy– while you keep spending and remain in debt.

Action Item #2

The 2^nd action item is for you to stop spending at least $5-10 extra a day or $40-50 per week. Even if that’s just on work days. Stop spending on those “extras” that you don’t actually NEED. 

Cut just a small amount out of your daily spending. And instead, take the money that you would have spent, in cash, and set it aside. (In a savings account, an envelope, whatever works for you.)

And do these things instead:

• If you must have it, start making your coffee at home.
• Make your lunch at home too and bring it with you to work. This can easily be done if you just make a little extra at dinner and have it for leftovers the next day.
• Grocery shop (and use coupons) and make easy, simple meals at home. The web is filled with recipes for inexpensive meals.
• Use products that you already have. (I always seem to have extra makeup, hair care, or other products that I haven’t used up, but I still bought new stuff instead—stop that too.)
• Stop getting your hair and nails done at a salon. Do them yourself at home, or get a friend to help you.

Who cares if it’s not “cool” to bring your own coffee or lunch? Who cares what your co-workers might think—this is for YOU! To change your life!!

Isn’t that worth more than being “cool”? They don’t live your life- it’s your life and you make the decisions for your own happiness.

Next, when you are doing your regular grocery and personal care shopping during the month, for each item that you pick up—really look at it, and think to yourself, “Is this essential? Do I already have something like this that I haven’t used up yet?” And if you can honestly answer to yourself, “No, it’s not essential” or “Yes, I still have some at home,” then don’t buy it!!

Also, if you do have to buy things, there are still easy ways for you to get discounts through programs like Ibotta and earn cash back on stuff you were already going to buy. If you join through my link, you’ll also earn a $10 bonus for free!

There’s definitely other programs like that, that you can use to save when you do have to shop. Apps like Ebates & Groupon are also very popular and easy to use.

Sounds simple right?? It can be if you actually do it!

Another small tip here—I started leaving my debit cards at home and only keeping $40 in my wallet for true “emergencies.” I only bring my debit card with me if I know I need to get something essential that day.

It has really helped me—seriously. If you try it, I’d really love to hear about your experience.

Let me know how it goes!

And ladies, I know you really don’t want to hear this one, but you really should think about cutting out the salon in your life until you’re out of debt. It really is such a huge money suck, and you have lots of inexpensive alternatives for hair and nails.

Lastly, you need to create a budget and stick to it. If you don’t know how to do this, I’d be happy to help you, just leave me a comment and I’ll reach out!

Step 3–Overspend

My last tip today to help you change your money mindset is to be careful about what you spend on holidays, birthdays, weddings, and vacations and the like.

If you have kids, it might be hard to reign this in, I understand. But just remember that there will be another Christmas and another Birthday next year.

Also, kids get bored with things easily, and in a month or two, they might not even remember what gift came from who. Ask yourself if buying that extra gift for them will really make a difference in their lives?

As mentioned earlier, one thing I try to think about when shopping, is if my loved ones knew how miserable I was throughout the rest of the year, being in debt, they would probably tell me to save my money rather than get them an actual gift- and that could be your gift to them.  

Helping yourself get happy! Your loved ones don’t want you to buy them a gift if it means you’re going to be unhappy with more debt for the next year. They will be okay- you will be okay.

And here are a few alternatives you could try instead, or just see my article 154 Cheap & Free Gift Ideas for Christmas.

• Write them a very personal, heartfelt Christmas card or letter. Tell them how much they mean to you.
• Give them service- or give them handmade “coupons” for things that you can do for them or with them over the next year- your TIME is a gift
• Make them something handmade. (Sew, Knit, Bake, or etc.)

I’m sure you can probably think of many more ideas if you really try. It’s okay to use alternatives and do something other than the “traditional.”

Those who love you will hopefully understand, and appreciate your attempts to be smarter with your money. They want you to be happy- and it may just be a conversation with them to explain this change.

You can also think about this in terms of spending on vacations. Even though I do think experiences are worth more than things– while you’re still in debt, you probably shouldn’t be traveling.

Think about what you could really do, and places you could actually go, if you were out of debt. Those vacations will be so much the sweeter if you go on them being debt free.

And again, these are just temporary changes. In special events to come in the future, once you’re out of debt- your opportunity to give gifts or go wherever you want, will be incredibly higher. And, you’ll feel so much better about it too!

In Conclusion

I hope these ideas have been helpful! I can state with complete confidence that they changes have been invaluable for me. I’m not out of debt yet- but I’m closer now than I’ve ever been, and it feels amazing to be able to see a light at the end of the tunnel. And that’s what I wish for you too!

I’ll be posting again soon with the next article in my Debt Detox Project series—but until then- please sign up for my newsletter, LIKE this post, and/or post a comment telling me what you thought of this article and what other topics you’d like me to cover!

P.S. Don’t forget to print out the FREE Worksheet to help you get started with the action items today!

Read Also: The Formula to Stop Waiting and Start Working on Your Goals

Disclaimer- Please note that I do not claim to be a financial adviser or an expert related to personal finance. Your situation maybe different and you may not experience the same results as I have. Please remember that this information is meant only to be educational and inspiring, so that you can make some lasting changes in your life to improve your finances. Please see a trusted financial adviser for assistance in making your financial decisions. See my full Disclaimer in my Privacy Policy & Terms and Conditions.