Is Your Brain Keeping You Broke?

Money can be a never-ending battle that leaves you feeling hopeless, have you ever thought it could actually just be in your head? Studies have shown that the way we feel and deal with money can go a long way to determining our financial health.

How Mindset Affects Money

The thoughts and actions that control our minds established the foundation of who we are as human beings. Such negative emotions of money or belief that one can only get so little may be working behind the scene unknowingly wrecking our financial success. Alternatively a positive and proactive mind set can lead to new doors of opportunities financially.

Pareto Principle For Output

The 80/20 rule, more formally known as the Pareto Principle is an important concept to keep in mind. The principle claims that 80% of effects come from 20% of causes. In the finance world, this implies that a tiny % of above efforts — maybe even just 2 or so key ones — will drive most your outcomes.

• Are you focusing the lion’s share of your time and energy on only few key investments?
• Evaluating What You Spend Your Money On: Correspondingly, to 80/20 — is 80% of what you spend your money on coming from the same 20%? Track individual outgoings to spot potential areas where you can cut costs.
• In debt Management: besides the above, are most of your payments going specifically to interest?

When you work on these major areas, it is possible to significantly change your financial life around

Altering Your Financial Psychology

There are a number of ways to change your mind set and thus, improve your financial position as well:

1. Learn About It. Knowledge Is Power The more educated you are on personal finance and investing, the more at ease you will be in making those types of choices.
2. Establish Goals: Establish what financial success means to you. Specific and measurable goals can be the north star that guide you.
3. Use Positive Affirmations: Start thinking with a mindset of abundance and not scarcity. When you absorb those similar beliefs, they will help shape your financial future in a more favorable direction.
4. Positive Peer Pressure: Surround yourself with communities (or people) who have a growth mindset about money. Their outlook, thoughts and mindset they adopt can be enriching and give you the energy to power through.

Conclusion

It is not a matter of whether or not your brain does this; it shows you the behavior patterns and systems, as well that define Life by default. To plan for being financially fit, you need to apply the Pareto Principle over investing as well with your expenses and debt and also focus on building a good karma around money so that it attracts more positive things towards yourself.

Have you been benefiting your financial success by the way of your thoughts or vice versa? Pause… Sophia is introducing a simple act that might enable you to reframe your success mindset.