Trick Your Brain to Be Better with Money: Practical Strategies for Financial Success
- Miguel Virgen, PhD Student in Business
- Nov 1, 2024
- 3 min read
Updated: Mar 14
January (Doctors In Business Journal) - Managing money effectively is a skill that many struggle with, but the good news is that you can train your brain to make better financial decisions. By understanding the psychological factors that influence your spending habits and adopting strategies to change your mindset, you can take control of your finances and build a healthier relationship with money. Here are several practical approaches to trick your brain into being better with money.
Recognize any limiting beliefs that may hinder your financial success. Common beliefs include "I’ll never be good with money" or "Wealth is for other people." Challenge these thoughts by replacing them with positive affirmations, such as "I am capable of managing my finances" or "I can build wealth through smart decisions."
Changing how you perceive spending can significantly impact your financial behavior. Instead of viewing spending as a reward, try to see it as a choice that impacts your financial health.
When tempted to make an impulsive purchase, implement a "cooling-off" period. Wait 24 hours before deciding whether to buy the item. This pause allows your brain to process the decision and often results in reconsideration, reducing unnecessary spending.
Instead of thinking of a purchase as an expense, frame it as an investment in your happiness or well-being. For instance, if you’re considering buying a gym membership, think about how it contributes to your health and future savings on medical costs.
Recognizing and celebrating small financial victories can boost your motivation and reinforce positive behaviors. As you work towards your financial goals, set milestones and reward yourself when you reach them. For instance, if you successfully save $1,000, treat yourself to a small, budget-friendly reward, like a nice dinner or a day off to do something you love.
Regularly take time to reflect on your financial journey. Celebrate improvements, such as paying off a credit card or sticking to your budget for a month. This acknowledgment can help maintain motivation and reinforce your commitment to better money management.
Adopting a growth mindset—believing that your abilities can be developed through dedication and hard work—can enhance your approach to money management.
View financial challenges as opportunities to learn rather than setbacks. If you encounter difficulties, such as unexpected expenses, analyze the situation and seek ways to improve your financial literacy. Reading books, attending workshops, or taking online courses can broaden your knowledge and skills.
Building better money habits takes time. Recognize that setbacks are part of the process and that each step forward, no matter how small, is progress. Practice self-compassion and remind yourself that financial mastery is a journey.
Improving your financial habits doesn't require drastic changes or innate talent; it simply takes intention and practice. By tricking your brain through awareness, automation, and positive reinforcement, you can develop a healthier relationship with money. Implement these strategies gradually, and over time, you’ll find yourself making smarter financial decisions, building wealth, and achieving your financial goals. Remember, every small step counts on the road to financial success.
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Additional credible news sources for further research and citations:
Bloomberg, The Wall Street Journal (WSJ), Financial Times (FT), Reuters, CNBC, The Economist, MarketWatch, Yahoo Finance, Business Insider, Investing.com, ZeroHedge, The Balance, Morningstar, TheStreet, The Motley Fool
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