A person’s success depends on a wide variety of factors. What many people see is the person making the right decisions or just doing all the right things. They only see the surface – the outside and they assume that this is all they need to be successful.
They believe that world-class athletes are successful as they are because they train every day. Many would assume that famous authors are successful because they happened to be creative. While that is not a wrong answer, we are overlooking the key component to success – mindset.
Think about it. How come some people seem to always shine in any situation and they choose to give it all their efforts while others barely manage to express the slightest hint of enthusiasm even though they are the expert?
According to research, it’s not so much about the skills that people have that determine how successful a person is. It is how they think about them.
Most of the time, you can’t even see the end and along the way, you will meet many people who would tell you that you will never amount to anything.
Successful people also faced the same problems and they were just as uncertain about themselves, yet they pushed away the critics and they pressed onward. They worked hard and they believed that they could achieve whatever it is they set out to do, and they did just that. Look at where many successful people are today.
Okay, so we know that mindset is important to be successful, but surely it doesn’t matter for mundane tasks, right? Wrong. Mindset plays a major role in determining achievement and success. That’s dandy and all, you may say, but what does this have anything to do with money mindset?
What I’m saying is that everything, even the small things, depends on your mindset. If you cultivate the right mindset, you can achieve everything. In this case, cultivating the money mindset will help you control your finance better.
But before we get into the intricacies of mindset, let’s start from the beginning. What exactly is a mindset?
What is a Mindset?
In the last article, we know that the money mindset is all about your belief regarding money. A mindset is a general term that refers to your belief in whether qualities such as talent and intelligence can be changed or not.
From this, we can immediately put people into two large groups. Those who have a fixed mindset are those who believed that traits and qualities are inherited at birth and cannot be changed. Those who have a growth mindset believe that traits and qualities can be developed and reinforced through time and effort.
The Two Types of Mindsets – Growth Mindset vs Fixed Mindset
To understand our mindset further, let’s look at an example. Suppose that you are given a very difficult problem to solve. How would you see it? Some see it as a challenge and a learning experience – even if they fail to solve that problem. Others see that the task is impossible to solve and feel like their intelligence is being judged for their failure.
The first group of people has a growth mindset because they always see where they could improve as they face challenges in their lives. They understand full well that they cannot solve all problems and that they need to develop other skills if they want to solve them. They see rooms for improvement.
Alternatively, children who are encouraged to explore and embrace new experiences, even if it means making them look silly and awkward at times, and enjoy a challenge are more likely to develop a growth mindset.
Kids who are taught to explore and enjoy challenges are more likely to develop a growth mindset. Of course, learning something new puts you at risk of failing. But failing is not a problem because children learn quickly to see mistakes as setbacks. They become more willing to try new things and make mistakes because making mistakes is a way to learn.
It is worth pointing out that having a growth mindset doesn’t mean believing that anyone can do or become anything with enough effort and education. There is a limit to what can be achieved based on circumstances outside everyone’s control.
No one can become the next Einstein or develop a time machine just because they try.
The growth mindset here is all about living up to your possible potential although no one really knows the limit of this potential.
After all, who knows how far you can go if you set your mind to it? Individuals with a growth mindset believe that it is worth the trouble and frustration to learn and develop their skills.
In short, individuals with a growth mindset are willing to learn and do not let failure stop them from achieving success. To change your money mindset, you want to develop a growth mindset. Having this mindset not only helps you retain control over your finance but is also key to success in any other area in your life.
The second group has a fixed mindset. They also understand that they have limitations when they cannot solve problems. The issue here is that when it happens, they do not think they can ever solve it. They believe that they just don’t have it within them to do it, now and ever.
People with different mindset think and respond differently, especially in regards to performance. For those with a fixed mindset, their brain lights up and becomes active when they are told exactly about how well they have done based on the result. Alternatively, the brain of those with a growth mindset lights up and becomes active when someone tells them how they can improve.
Basically, the difference is the former cares about how others think of them and the latter cares about how they can improve themselves. You can already tell which one is more likely to have a bright future.
Why Mindsets Matter
Your mindset is key to how you cope with life.
What you think of yourself determines how you act every day.
A growth mindset could mean that you put more effort and achieve more in the classroom. People with a growth mindset often rise up to the challenges and display greater perseverance in the face of setbacks.
Those with a fixed mindset are more likely to give up. They tend to need approval. They feel like they have something to prove no matter where they are, be it in the classroom, careers, or relationships. Every situation that they face, they feel the urge to get a confirmation of their intelligence, personality, or character. They evaluate their situation all the time.
On the other hand, those with a growth mindset have a hunger for growth. They want to work hard and learn new things. They love a challenge because it is the quickest way they can learn and grow. Whether they succeed or fail, they see it as a learning experience that leads to growth and change.
How Does a Mindset Form?
In the early stage of our lives, we either develop a fixed mindset or a growth mindset. Whichever category you fall into is determined by your childhood experience. Your parents at home and teachers at school determined the kind of mindset you have.
For those with a fixed mindset, when they were children, they were most likely taught to look smart instead of risk looking silly and try to learn something new. This prevents them from developing a love for learning because it makes them look vulnerable. They become more and more concerned with how other people judge them and they are afraid that they may fail to live up to expectations.
Dealing with Setbacks
Different mindset also determines how people respond to setbacks. Those with a fixed mindset become discouraged by setbacks. To them, setbacks are smears in their (perceived) image. They become uncomfortable when they are faced with a setback as it is proof of their lack of ability. Rather than accepting this flaw and work to improve themselves, people with a fixed mindset simply give up so as not to embarrass themselves even further, even if it means not learning anything from the failure and ignoring their flaws.
On the other hand, those with a growth mindset see failure as a learning opportunity. If they fail to do something, then they see it as the border of their competency or comfort zone. They then work harder to expand this zone until they overcome the problem.
Can You Change Your Mindset?
Although your mindset was established when you were young, that does not mean it cannot be changed. When it comes to personal qualities, only a few things cannot be changed or learned. You too can change your mindset.
Think of our brain as plastic that we can shape over time. Children’s brains are easier to mold and shape because they are young and absorb information more efficiently. That does not mean adults cannot change their mindset. You can actually teach old dogs new tricks, although it may take a long time.
When I say molding our brains, I mean shaping the neural pathways. That’s how memories are formed and information is retained. It’s a complex system that we don’t fully understand, but at least we know that the neural pathways are not set in stone. They can be developed by doing or thinking of particular things.
That means the things we do or say often become hardwired in our brain, which cause us to develop habits and personality.
A great example is breathing. You might realize that you have been breathing without putting any conscious effort at all (until now, sorry about that).
This is a habit that is hardwired into the brain through initial conscious effort until it becomes automatic. This is convenient for the brain so it can focus on more important matters.
Habits can be learned and forgotten with enough effort. The first and most important step is to understand that you need to replace bad habits with good ones. Then, you can start to train your brain to do just that.
There are three main things you can do to develop a growth mindset.
- First, you need to understand and recognize that a growth mindset is not pseudoscience. It is something that you can benefit from and science proves this. Basically, you need to make a commitment to make the change.
- Second, you should spread what you have learned about growth mindset so they can become more competent. Either that or learn from those with such a mindset. Doing so will give you more control over your life, which can be very empowering. People tend to perform better when they feel that they are in control.
- Finally, keep an eye out for the fixed mindset voice. It will come up from time to time and it will tell you that you cannot do something. It is the voice that belittles you every step of the way. When that happens, simply acknowledge the fact that you may not be able to do it, but you will certainly give it your best shot. Hey, even if you fail, it’s not the end of the world. You can always learn and come back to it.
Having a growth mindset is not only important to develop skills. It influences how you think about life as a whole.
There are stories of people who fully recovered even though the doctors said that they had no chance of recovering. This happened because those people have a growth mindset and they believe that they can do something about the illness by not falling into despair. You can recover faster if you are in a better mood.
The benefits of a growth mindset extend to every aspect of your life. So, cultivating it could be the one thing you need to do right now to help you achieve success. It certainly is a requirement to cultivate your money mindset.