How Money and Your Money Mindset Affects Your Life

the concept of money

Hello and welcome to “The Money Mindset” series. The fact that you are here means that you feel like there is more to money than meets the eye and you want to find out more. If you want to have more wealth in life, you need to change your money mindset. That is the shift from a mindset of scarcity to abundance. But before we dive any deeper into this, let’s take a step back and understand what money really is and the roles it plays in your life.

What is Money?

To many people, money is a piece of paper that is worth so much that some would kill for it. But this is a restrictive definition. The money’s worth is not the number written on it. Rather, it’s the value we assign to it.

Before money was invented, people used to trade items. If you want a sack of rice, you need to give up your wolf pelt or something of equal value to the rice. But this practice is very inefficient and people started finding ways to make transactions easier. They needed a convenient medium of exchange. Different cultures tried out different things such as using beans or shiny stones we call silver, gold, and diamonds. Eventually, coins and paper money become popular and this is where we are.

Simply put, money is a medium of exchange. Think of it as a credit system tied to the paper in your hand. You redeem this paper to get something else of equal value.

The Concept of Money

Money and Life

There are many ways money is interconnected with our lives. Here are some examples:


There is a major misconception that if you want to be rich, you need to work long and hard. That means, to become a billionaire, you need to work 12 hours a day, 7 days a week, with little to no break. People think that this is the minimum requirement. Some are so caught up in the pursuit of wealth that they are losing sleep and are under constant stress. But here is a simple question.

Would you rather be rich or healthy?

The answer should be obvious. No one wants to be rich and ill all the time. A lot of people out there overwork themselves to make some extra bucks, only to spend it all (or even go into debt) to treat themselves when they fall sick.

But we are missing one important point. You don’t have to overwork yourself to become rich.

Wealth and health are not exclusive. You can have both.

The reality is that wealth gives you better access to healthcare. I’m talking about world-class healthcare, preventive medicine and other treatments that demand a high price. If you develop a nasty disease that requires a special treatment using a cutting-edge procedure that is unavailable in your area, you can go straight to the place that offers the treatment you need.

Having an abundance of wealth also saves you from one of the biggest problems in life – money.

Many people worry about money and this alone puts a fair amount of stress. Having enough wealth means you don’t have to spend sleepless nights worrying about how you can pay off the debts and bills. Think of how free you will be if you don’t have to worry about money.

Can you imagine how happy you will be if you do not have to wake up to an alarm clock and sleep for as long as you want?

Can you feel the freedom in firing your horrible boss because you are no longer constrained by money and work the job that you love?

As you can see, wealth can actually improve your physical and mental health. It’s just a matter of how you earn and spend it.


The misconception I’ve pointed out before also applies here. I have met many middle-class people who think that they have to choose between a happy and peaceful family life or career success (becoming CEOs, multi-billion-dollar entrepreneurs, etc.) but they cannot have both. Again, this is not true at all.

We have been misled, brainwashed to think that family and success are mutually exclusive. We believe this to be true because of fear and scarcity mindset. These two things tell us that you only have so much time in the day and so you must choose between working on your career or spend time with your family.

If you really love your family, then they should be your goal in earning more. When you have more money, you can slow down and spend more time with your loved one. When you have more money, you can afford luxuries and experience that only money can buy.

Your family should not be an excuse to make money. They should be your main motivation to earn more.

Now, I’m sure you’ve seen your fair share of dysfunctional (and rich) families. It’s easy to pin the fault on the money. In reality, dysfunctional families are already this way even before money got involved. It’s not money’s fault. The thing is that money just amplifies everything it touches.


They always say that wealth and fame can change a person drastically. Some people are scared of becoming wealthy just because they think they will lose their best friends. They reasoned that when they make enough to move to the most expensive mansion in the area, their friends will no longer visit them because of the class difference. After all, money is meaningless if you do not have any friends.

In reality, this rarely happens. You might lose a few friends because they are envious of you. If that is what you fear, then think about it. Are they really your friends? Is being envious something that friends do?

You might have friends from various backgrounds in the past and you don’t really care how much money they make. If you are wealthy, you will gain more friends than you lose. Sure, some of them aren’t really your friends because they befriend you for the simple fact that you are rich. You will have to figure out a way to deal with them. On the other hand, money can open up the world to you.

You can afford to travel to exotic destinations, meet new people, and build a network of vastly skilled and successful individuals from whom you can learn from. You will learn many valuable lessons.

The Money Mindset

Money is deeply rooted in our lives. As you can see, money’s influence on your health, family, and friends all depends on your perspective. This is the money mindset that I talked about at the start of this article.

A money mindset is your personal belief about money and how it works in the world. It is your attitude toward money. This mindset alone shapes what you think you can and cannot do with money and how much you could earn and spend.

The money mindset also shapes your perception of the rich and the poor. You may think that rich people are self-centered, evil, greedy, and materialistic and you don’t want to be one of them. You might think that poor people are virtuous and noble, so you find comfort in their company.

How you handle yourself in conversations related to finance is also influenced by your perception of money. It could make you feel anxious, vulnerable, and materialistic, or it could make you feel excited, confident, and in control. You may feel comfortable speaking up and asking questions or you feel shy and embarrassed and remain quiet.

What is interesting about the money mindset is that all of our perceptions of money are in our subconscious mind. You do not know that you have such beliefs even though they influence how you behave throughout the day. You can bring these beliefs to the surface by observing your own thoughts, reactions, feelings, and interactions.

How the money mindset is formed

People grow up differently because they have different childhood experiences. We observe and internalize messages about money that we hear from people around us, especially our parents. The same goes for our money mindset.

Think of children’s brains like sponges. They absorb all kinds of information very quickly, which is why education takes place when you are young, and the phrase “You can’t teach an old dog new tricks” holds true. Children observe their immediate environment and learn by imitation and listening.

Many factors influence your money mindset, most of which occur during childhood. If you grow up without enough money, you had to deal with illness, death, divorce, unemployment, and other hardships. Such experience gives you a negative impression on money and leads you to feel financial stress, tension, and the feeling of scarcity.

Your parents have the biggest influence on your money mindset. Do you know how your parents talk about money? Do they make nasty comments when they see a rich (and pompous) person? Do they do taxes happily and willingly or do they complain that the government is stealing from the poor?

If you’re from a family that believes that they do not and should not get ahead in life, then you may have a similar subconscious belief. In fact, you may feel uncomfortable if you do get ahead in life and make more money than your parents.

On the other hand, if your parents are generous and thoughtful and speak calmly and respectfully, your money mindset changes positively.

Why Understand Money Mindset?

When you understand your own perception of money, you can work to change it. It gives you a starting point to work from. As you work on changing your mindset, knowing where you started also helps you see how far you have come.

Why Change Money Mindset?

Knowing how deeply rooted money is in our lives, you can start to see how many tragedies unfold around money. Many people struggle with finances. A lot of us are still in debt. There are more people who make just enough to get by each month than you think. This could be because these people grow up believing that having “just enough” is enough. This is a very narrow mindset that many people have, and that needs to stop.

Now, I understand that some people out there would settle for having “just enough”, especially those who cannot make ends meet. But the reality is that when you have such a restrictive belief about money or its abundance, it can hold you back in life a lot.

Just think about it. If you have barely enough money to get by, then you may run into these situations:

  • You have enough to pay the bills, but not enough to save up.
  • You have enough to put food on the table, but not enough to take yourself or your family out to enjoy fancy restaurants or buying healthy meals, or trying out new and exciting things.
  • You work hard to make ends meet but don’t have enough time to follow your passion or educate/develop yourself.
  • You might make enough to go on a vacation once a year but you cannot afford to travel the world, see new and beautiful places, fly in business class, and stay in a 5-star hotel.

What I’m saying is that you’ll survive by making the bare minimum, but you won’t get to live what life really has to offer. Of course, living life to the fullest will cost you money. Even so, your life should not revolve around money alone. If your sole purpose is only to make money and make ends meet, life is pretty much meaningless for you.

The perpetual pursuit of money has left many people feeling unhappy and empty. Everyone has been in this phase at least once. Some people got out of it because they changed their mindset about money. They can do it, and so can you.

The money mindset is not something inherited at birth even though your childhood experience shaped how you perceive money. It can be learned. You can work on changing your money mindset. I will show you how in the following articles in the series.

Founder, writer, thinker and digital marketing addict. He is passionate about self-development, personal finance, and the stock market. He believes that financial knowledge combined with self-discipline is the key to achieving financial freedom. An avid golfer and a 15 handicapper.

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