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We all have them. Limiting beliefs about money that hold us back.
There is a complex history of money beliefs and habits that we learn growing up, as well as cultural and societal norms to navigate throughout adulthood.
Self limiting beliefs about money prevent us from earning more, paying off debt and building wealth. They dictate our attitude towards money. And this is very difficult to overcome.
But it is possible to overcome your limiting beliefs surrounding personal finance and money management.
Here is a list of common limiting beliefs, and how you can overcome them.
Be sure to download the Limiting Beliefs About Money Worksheet so you can highlight those areas that resonate with you, and write down how you will go about overcoming them. Then, never forget, you have the power to change your money mindset and achieve your financial goals.
I don’t know enough to get started
Everyone has to start somewhere. If you feel like you are completely overwhelmed and don’t even know what to do first, you are in the right place!
There is absolutely no shame in educating yourself and learning now.
There are also many resources to get you started. Here’s a list of resources from Stepping Stones to FI, in order of how to start. But one site might not match your particular needs or be the right fit for you. I highly recommend these books to get started. They are easy to read and will help provide an overall understanding of how to manage your money.
Personal Finance Basics Links
- The 12 Financial Rules to Live By
- How To Track Your Personal Finances
- The Beginner’s Guide to Creating a Budget You Can Stick To
- How To Payoff Debt – Like a Boss
- How To Save Money on Your Biggest Household Expenses
Books to get started
The Simple Path to Wealth: Your road map to financial independence and a rich, free life
Set for Life: Dominate Life, Money, and the American Dream.
There are too many resources and I don’t know where to start
That’s right, I read your mind!
Ignore everything you just read in the above section. Start here instead.
How To Achieve Financial Security in 7 Simple Steps
Money management is a chore and requires too much time
It might feel that way in the beginning. When you’re slogging through blog posts and books and trying to learn exactly what to do and where to start.
But money management does not have to take a lot of time. In fact, most of your financial tracking and management can be streamlined and automated. Bill pay, debt payoff and transfers to savings can all be automated. There are apps that are easy to set up and provide instant visuals of how your budget is doing this month and how close you are to achieving your savings goals.
Most people report that they spend about an hour a month actively tracking expenses and reviewing their budget.
I’m a huge personal finance nerd, I check my Mint account daily, but it all adds up to about 5 minutes a day, which amounts to about 2.5 hours a month.
Now ask yourself how much time you spend on social media and Netflix? Could you perhaps shift just a fraction of that time to achieving financial security?
There’s too much to know so I shouldn’t even try
How do you eat an elephant?
One bite at a time!
This is something I remind my son All. The. Time.
Start with tracking your finances. Don’t think about anything else. Just download an app to help you do this, like Mint or YNAB, link your bank accounts, and review your expenses. Make this your ONE priority and don’t worry about anything else until you’re comfortable with this step.
Once you are comfortable, move on to creating your budget. Again, don’t worry about anything else, just work on this ONE thing.
One bite at a time.
Revisit this post later by adding it to your favorite Pinterest board!
Everything needs to happen today
Personal finance is a journey. It won’t happen in one day or even one weekend.
You won’t eat that whole elephant in just one sitting.
Be proud that you are taking steps to control your finances and enjoy the journey. Celebrate every little milestone, every debt you payoff or savings goal you reach. It will take time, and that’s okay.
I’m just not good at personal finance
There are very few things, if any, that people are just naturally good at. Most things take time and effort.
So while you might feel like you are bad with money now, you have the power to change this! It all starts with education and practice.
Pick one area to work on, learn what you can do today, then go and do that one thing.
Repeat this one thing again tomorrow. And the next day and the next until you become comfortable with it. Once you are comfortable, move on to the next skill. Eventually you will reach the day that you realize you do have control of your money and you don’t actually suck at personal finance.
Read more on How To Not Suck At Personal Finance here.
It’s too complicated to organize and track my finances
Personal finance is just that. Personal.
Which means, you get to make this as complicated, or as simple, as you want!
If creating a giant spreadsheet in excel is not for you, don’t even attempt to go that route. Start simple by using an app like Mint or YNAB. I recommend Mint to start simply because it is the most simple to set up. Just link your accounts and you are ready to dive in.
I have too much debt and can’t save or invest any money
One of the most common personal finance questions I hear is how to prioritize debt and savings.
Debt, particularly high interest debt, certainly take priority. However, unexpected expenses can and do happen, so it’s important to also have an emergency savings fund.
It is difficult to find the right balance between paying off debt and building an emergency fund. The amount you need to save will vary based on how stable your income is, what your monthly expenses are, and what type of unexpected expenses you might encounter. For example, if you have pets, it’s reasonable to assume that you could encounter a $1,000+ vet bill. When you already carry debt, this is something you don’t want to add to your credit card.
Ideally you want 3-6 months worth of monthly expenses in a readily available account. If you are starting with nothing, try paying the minimum on debts and saving the remainder for your emergency fund. Continue this until you have enough of a cushion to provide a bit of peace-of-mind. Once you have around 1 month living expenses saved, continue applying the extra income towards debt.
As for whether to invest or payoff debt, that depends on the difference in interest rates. If your car loan has a 1.5% interest rate and your 401k retirement account averages around a 7% return, your better off putting extra money into your retirement account rather than paying your car off early. Same goes for a home mortgage.
I don’t have much savings but I have to contribute to my kids’ college fund
Kids can be responsible for covering much of their college expenses, be it loans, scholarships, working through college, and limiting their options to local state colleges.
They may not even want to go to college right away.
If you are not in a strong financial position, you do not have to put yourself in an even worse financial position and jeopardize your retirement years.
Many kids that had to cover much or all of their college expenses finished school with a better financial education than those that didn’t think about money. They have a better appreciation for the value of their earnings and how to budget responsibly. I would argue that this is a benefit to your child, not poor parenting.
I have too much debt and I will never be able to make progress
If feels like that now.
However, there are so many inspiring stories out there of people just like you that managed to climb their way out of hundreds of thousands of dollars in debt. And you can too. You will also learn so much along the journey. And that’s okay.
If you need some inspiration, head over to Budgets Made Easy. Ashley has some amazing debt payoff stories that will leave you convinced that you, too, can payoff that debt.
I will suddenly run out of money
That is certainly a real fear. But is it a rational fear?
Ask yourself the following questions:
- Do you have an emergency fund that covers 3-6 months of living expenses?
- Do you contribute regularly to a retirement account?
- Do you have a reliable job or a skill that you can fall back on if you were to lose your job suddenly?
If you answered yes to these questions, the fear of suddenly running out of money is not likely based on logic.
Take a moment to imagine, if you were to suddenly lose your job tomorrow, how long could you cover your living expenses and what actions would you take to quickly replace enough income to cover those expenses?
If you aren’t sure, take some time to brainstorm and explore your options. You may discover that finding a new job wouldn’t be as difficult as you think and that you really won’t run out of money as quickly as you think you will.
Even if you had to work at your local Starbucks for a period of time, you will likely be able to lower your expenses and cover your necessary bills until you can find a more permanent solution.
Making extra money requires a huge amount of effort
If you provide value, you can and will make money.
This is true of W2 work and it’s true of entrepreneurs.
There are unlimited side hustle possibilities. Some require a huge amount of work on the front end and don’t turn a profit for years. But that’s not the case for all side projects and business ventures.
With a little creativity and planning, many side hustles are cheap to start and can be managed while working a full time job.
If you still aren’t convinced, check out this little gem of a book:
The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future
There is no end in sight and I will never have enough money
If you feel like you just can’t save enough money to ever be able to retire, let alone achieve your more immediate financial goals, there are a few things you can do to take action now.
- Track your finances so you know exactly where your money is going every month
- Calculate your savings rate
- Get creative and scrappy and find ways to cut expenses, earn more, and increase your savings rate.
Once you do these three things, you will start making progress. Your savings rate will determine just how quickly you move forward.
Read more at:
- How To Track Your Personal Finances
- How To Calculate Your Savings Rate – And Why You Need To
- How To Save Money on Your Biggest Household Expenses
- This Is What Your Retirement Savings Needs To Be At Every Age
The only way to achieve work/life balance is to pursue a crazy entrepreneurial passion project
I don’t actually agree with the belief that if you just follow your passion, the money will flow and you’ll automatically love your work. Anyone’s passion can be quickly crushed once it turns into a “job”.
I do believe that you can find fulfillment in life and work by honing your current skills and becoming the best at what you do.
Think about what skills you could learn or improve upon which will make you more valuable in your career. Are there positions you could train for which you would enjoy more? Would they pay better and provide more outside opportunities?
Here’s an example: Joe is a nurse. He works long hours in the ICU. It’s grueling work that goes unappreciated. He has too many patients to manage and feels crushed under department politics. He believes that he dislikes his career choice and dreams of building a business fixing mountain bikes.
However, instead of pursuing a side hustle building a mountain bike repair business, he decides to take online classes to earn a master’s degree in nursing. After three years he becomes a nurse practitioner. He shifts to the labor and delivery department and learns midwife skills. This encourages him to become a certified midwife. He now travels to local homes, works one-on-one with mothers-to-be and helps with home births.
He now finds tremendous job satisfaction, earns more than he could have as an unhappy ICU nurse, and still enjoys tinkering with mountain bikes in his spare time.
I hate my job but I’m stuck there
I get it. Change is hard.
Change is downright terrifying sometimes.
If you feel stuck in your job, do yourself a favor and, in the privacy of your own home, where you’re allowed to do whatever you darn well please, explore some other options.
Look up a recruiter in your area and ask them what jobs are available. Ask them for any recommendations on career change options. They will know what skills are needed for both the job your currently have, as well as how to possibly add to them for other possibilities.
They will also know what you should be earning now, and what you will likely earn somewhere else.
You don’t have to take a different position. But you should know exactly what other options you have. Because believe it or not, there are always other options.
I’m worth more than I make
You can put this limiting belief to rest by finding out exactly what you’re worth. Start by contacting a recruiting agent and exploring other jobs. Even if you aren’t interesting in leaving your current position, interview for other options. You don’t have to accept a new offer, but you will benefit from learning exactly what you could earn elsewhere and use that information to request a salary adjustment.
If that doesn’t produce the desired results, explore opportunities to add new skills and focus on ways to increase your earning potential.
Lastly, don’t be afraid of a career change. Be creative and explore different ways to utilize skills you already have. A recruiter can be very helpful here as well. They will know of open positions for which you qualify for, or what skills you could quickly add which will provide additional opportunities in the future.
I probably won’t be given a raise so I shouldn’t bother asking
Sadly, this is a feeling common amongst women and minorities. It is something I struggle with myself. Even though I know I am underpaid and all I need to do is ask for a compensation adjustment, there is some lingering belief that I will damage relationships and ultimately be turned down anyway.
Not surprisingly, gender inequality is still an issue. Men are paid an average of 10%-20% more than women for the exact same job and qualifications. What is surprising, however, is that newer research suggests this isn’t because women aren’t asking for a raise. Since I myself am afraid to ask for a raise, I assumed this is a common issue for women. It turns out that women are asking, they just aren’t receiving a raise as often as men do.
Thankfully, the data suggests that this is changing with the younger generations. Which suggests that attitude is a large factor. How you ask for that raise, and how confident you feel that you should receive one, may determine whether you do or not. Younger women may feel more empowered and confident, and behave more in line with how a man would go about requesting a raise.
So is this a limiting money belief based on reality? Probably. The solution seems to be that you should act more like a man. Be confident in your ability to request a raise successfully, as well as your value to your team and company.
Follow the steps from the previous limiting belief on being worth more than you are paid. This will help you gather information and come to your meeting armed and ready to negotiate with confidence.
I’ll never be able to earn as much money as ( .)
I’m sure you can come up with a few choices to fill in this blank. It could be your husband, someone more educated, or pretty much anyone else around you.
This ties into the previous two limiting beliefs, not being paid your worth and not feeling confident in asking for a raise.
The way to overcome this belief is also the same.
Do your research and go after what your value really is. Then, be okay with this.
If your husband is CEO of a large company and earns a very high salary, it’s possible you won’t ever earn this much. But would you want to take his place? Probably not.
High salaries often come with high stress and long work hours. Do what is right for you, then fight to be compensated appropriately.
I haven’t completed enough education to earn more money
The belief that you have to complete higher education in order to make money is such a disservice to so many people. I don’t believe it for a minute and neither should you.
The other day my son asked me “Should I be worried if I don’t know what I want to study in college yet?”
It just about broke my heart to hear him ask me this. He just started 9th grade! Of course he shouldn’t know what the heck he wants to do in college! I don’t expect him to even know what type of college he wants to go to.
I explained to him that going to college does not guarantee a high paying job or happiness in life. For most kids now, the only thing college guarantees is a mountain of debt that delays them from ever saving money or planning for a secure retirement.
In many cases, a college degree actually limits the amount of income you can ever earn. If your degree is in accounting, and the average salary earns $75,000, you are more likely to cap your earnings around $75,000. Simply because this is the range you expect to earn.
However, if you go to a trade school to learn how to refinish cars, and you have no limiting beliefs on what you should earn with this skill, there’s nothing preventing you from reaching for the stars. Very few people have the skill to fix up and refinish a classic car. Maybe you use this skill to start a luxury car business, buying old cars at auction, fixing them and completing custom paint jobs.
It’s often creativity and consistency that leads to high earning success. Not the degree you earned in college.
Everyone else has it together but I’m too overwhelmed to even try
Don’t compare the start of your personal finance journey to the middle of someone else’s journey.
Your journey is yours alone and where you are now is just the beginning.
Revisit the very first steps to get started and just take one step at a time.
I can’t stop spending money
It is difficult to shift your money mindset.
Before discovering money management, it’s easy to fall into the trap of spending money when you have. It’s sitting there in you bank account, it’s there for spending, right?
Before you spend, ask yourself if you have paid yourself first.
Not sure how to pay yourself first or why you should? Visit The #1 Wealth Building Secret…..
Next, ask yourself if you have any financial goals that you are working on. Does your money need to go towards a specific goal like debt payoff or saving for an emergency fund?
Give every dollar that is deposited into your account a specific job to do. Every dollar goes towards monthly living expenses or a financial goal. Once you know what that money should be doing, you will know how best to spend it.
And if that money is designated for personal spending, by all means, spend that dollar!
I’m starting too late and I will never be able to catch up
It’s never too late to plan for your retirement. Even if you are retirement age now and you find yourself with no savings, it’s time to form a plan. Rather than ignoring the elephant in the room and avoiding your difficult situation, take some time to meet with a financial advisor and figure out what your options are.
If you start saving early, you certainly have an advantage. Albert Einstein said it best:
Compounding interest is the eighth wonder of the world. He who understands it, earns it.. He who doesn’t.. pays it. – Albert Einstein
However, if you get a late start, you can still efficiently save for retirement. You’ll have to be more aggressive since you don’t have time on your side.
Visit how much to save by age to calculate how much you need based on your current age and ideas on how to increase your savings rate in order to catch up.
Wasting time as a Stay-At-Home-Mom
If you are lucky enough to be able to stay home and raise your children on one income, kudos to you! You are doing your most important job.
While this job isn’t for everyone, many people wish they had the same opportunity. There is time later to get back into the workforce and contribute to your family’s savings. You could even start early and take online classes in your spare time or at night after the kids go to bed. This way you will have a plan in place and a career path to follow when the time comes to go back to work.
If you are a stay at home mom, you and your family made the decision that this was the best option for raising your children. And that is commendable. There’s time to shift focus and start earning later.
It’s too hard to find a high paying job after being a SAHM
If you choose an entrepreneurial path, there is no limit to how much you can start earning once the time is right.
There are also a number of online programs that you can get started on before you are even ready to go back to work. You can complete any number of certificate programs, undergraduate degrees, or even higher education right from your own home.
Many cities also offer classes that are geared specifically for this demographic.
Another option is to contact a local recruiter and ask them what jobs are available and what type of training would be most marketable to your local job market. If you do this early enough, you can complete the training and be ready to apply for jobs as soon as you wish to go back to work.
My spouse won’t support my financial goals
This is a tough situation and a fairly common limiting belief than it should be.
If you and your spouse commonly argue about money, it’s time to meet and discuss the underlying issues. Perhaps you have very different opinions on how to manage the family finances. If your spouse is the main income earner for the household, there could be some feelings of inequality, frustration and resentment.
First, seek professional help from a marriage therapist, they can help you get the conversation started and uncover some of the hurt feelings leading to the arguing.
Secondly, agree to regular “money dates” or times to meet and discuss finances together. These are times when you can both openly discuss family finances and what goals you each have. During these meetings you can each set individual goals as well as family goals, and work out how to achieve them together.
Read more on this in my marriage & money series:
- How To Combine Finances as a Couple
- Managing Money as a Couple – What Works (and doesn’t!) For These 12 Couples
I will never be able to achieve my financial goals
This goes back to the feeling that everything needs to happen today. The answer is the same.
How do you eat an elephant?
One bite at a time.
Be sure to break your financial goals down into small, actionable steps. Once the goal is broken down small enough, you will know what you can do, every single day, to work towards achieving that big goal.
Success doesn’t happen overnight. But progress can be made every single day.
Be sure to visit How to Stay on Track to Achieve Your Financial Goals.
Investing is risky, I will lose everything
Yes, some investing is risky and will likely result in you losing everything you have. Notice I said some.
The world could experience a catastrophic disaster and the financial industry could collapse. But the thing is, everyone will be in the same situation.
The stock market can and will experience many more ups and downs over time. This is normal. It will come back up.
Unless you believe that the economy is a disaster and doomed to failure, by investing in the stock market you are investing in the future of your country. Will the USA experience a financial crisis of such proportion that we will never recover? Probably not.
So yes, the market will go up and down, but over time, historically it goes up at an annual rate of return of 10%. Some years it’s down, some years is down by a lot, but over time and averaged out, the stock market as a whole goes up every year by 10%.
The key is to diversify your portfolio, own a little bit of a lot of companies.
I highly recommend the book The Simple Path to Wealth: Your road map to financial independence and a rich, free life, by JL Collins.
He does a great job explaining why your money won’t just disappear one day and how to invest for long term wealth generation.
Fear of using investment income in retirement
This ties in with the last limiting belief about money and investing. It’s difficult to imagine the day that you stop earning a steady paycheck and instead have to rely on your own savings and investment income.
If you have an employee sponsored retirement account, like a 401k or 403b, or even a personal IRA, you have an investment company that manages that fund. Common wealth management firms include Fidelity or Vanguard. These companies offer free advice and assistance. They even offer simulation tools to help you visualize how much you have available in retirement and how long you can expect your funds to last.
If you have any fear surrounding how you will access your retirement funds, how much you can withdraw and how much you can expect to utilize over the course of your retirement, call an advisor or hire a fiduciary financial advisor. You want them to be a fiduciary advisor, meaning they are legally required to put your needs ahead of their own. They make money from their service fees rather than by managing your investments.
Investing just feeds the wealthy and I don’t want to feel like a greedy capitalist
No one said you have to invest in the big tech and oil companies that you are morally opposed to! In fact, you don’t even have to invest in stocks. There are many other forms of investing available.
Get into real estate investing, be it REITs, building your own real estate portfolio or offering private money lending to other investors, or, you can start your own business.
You are only limited by your own imagination and there are countless ways to build wealth outside the stock market.
Recap
By definition, limiting beliefs are thoughts that constrain us and prevent us from making progress. These beliefs reflect our core sense of self and ability. They are self-limiting and cause us to live a smaller life than necessary.
While this article provides a very long list of limiting beliefs about money, it is in no way complete. We all have a money culture that we carry with us from childhood. Often illogical and damaging, these habits and ingrained emotions surrounding money are difficult to overcome.
Use this list of common limiting beliefs about money to think about what you relate to and brainstorm additional beliefs that are holding you back. Then, think about ways in which you can overcome them. The sky really is the limit and there is nothing holding you back from achieving the life you want. You just need to push past these self-limiting thoughts and go after those financial goals with confidence.
Reach for the stars, if you don’t make it, at least you land on the moon.
