The Mindset Successful People Use to Grow Wealth
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"Your mindset predicts your income, net worth, financial behaviors, and debt levels."

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For many of us, money is never too far from our minds. In fact, almost 20% of U.S. adults spend more time thinking about finances than their work, health, or love life, according to a 2015 GoBankingRates survey.

And it turns out that the way we feel about money may have a big impact on our overall financial health. A positive outlook on money tends to make us more conscious savers and spenders, while a negative one can lead to harmful money habits.

Optimists are almost seven times more likely to exhibit better financial health than pessimists, according to recent research conducted by Frost Bank.

"Your mindset predicts your income, net worth, financial behaviors, and debt levels," says Brad Klontz, a financial psychologist and certified financial planner who founded the Financial Psychology Institute.

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Our core beliefs around money inform our behavior—and our behavior shapes our financial decisions. Case in point: A 2018 Bank of America study found that only 52% of women felt confident about managing their investments, compared to 68% of men. Other studies have shown that women do invest significantly less than men.

"If you want to do well with money, it's actually pretty simple: Save for the future and don't spend more than you make. But those are the two areas that people get in the most trouble over," says Klontz. "So why aren't we taking better care of ourselves? The answer is mindset."

How negative thinking hurts your finances

Here are three of the most common money mindsets that Klontz says can be bad for your financial health:

  • Money avoidance. People with this attitude put off dealing with money, or hide from it altogether, because it triggers feelings of fear and shame. This could mean not wanting to budget, ignoring your bills, ducking creditors, and putting off saving for retirement. It's essentially an out-of-sight, out-of-mind mentality.

    "Money avoidance is strongly associated with financial denial behaviors, like 'I don't want to think about my finances,'" says Klontz. "It does exist, it is real, and it does hurt you." Refusing to deal with money can have real-world implications: Bills can pile up and debt can start to feel overwhelming.

  • Money status. Those with this mindset believe “my self-worth is attached to my net worth,” explains Klontz. They may tell others they make more than they actually do, or routinely overspend on inessentials like fancy clothing and gadgets.

    "We're wired to be constantly aware of our social position within a tribe, and if you feel like your position is being somewhat compromised, it fires off all your survival instincts,” he says. But overspending on stuff you don’t need can cause you to rack up debt or hinder your ability to save.

  • Money worship. This mindset is rooted in the deeply held belief that more money will make you happier and solve all your problems. This could translate into putting a weeklong European vacation on a credit card, or impulse shopping for new shoes online when you’re feeling down.

    "It's really looking at money as the source of happiness and fulfillment in your life," says Klontz. "Of course, that's associated with terrible financial outcomes, like lower income, lower net worth, and higher credit card debt.”

The mindset that’s good for your financial health

There's one money mindset that Klontz says is associated with strong financial health and higher net worth: money vigilance. This mindset is built on just the right amount of financial anxiety—enough to keep you motivated, but not so much that you're stressed out.

"It's understanding that it's important to save for a rainy day, or feeling like you'd be a nervous wreck if you didn't have money saved for an emergency," says Klontz, adding that many wealthy people have and benefit from that mindset.

This money mindset goes hand in hand with financial literacy. Education helps build confidence and awareness, which in turn can help you feel empowered to handle your money well.

How to cultivate a positive money mindset

A lot our beliefs around money, Klontz says, are subconscious. The act of bringing awareness to your beliefs can jump-start change.

First, Klontz suggests asking yourself where your money beliefs came from. What did your parents teach you about money, and what was it like for them growing up in terms of their socioeconomic status? What were your family’s finances like when you were growing up? These aren't small questions—and thinking about the answers can help you better understand and change your relationship with money.

"Those experiences and messages directly link with the story you make up in your head around what money is, how it should be used, and what it means," says Klontz.

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