How Understanding Your Money Beliefs Can Prepare You For Retirement

The power of money beliefs has the potential to be highly underestimated. Your money beliefs may influence your retirement savings, retirement planning and even your retirement age. Gaining a deeper understanding of your money beliefs can have a positive impact on multiple aspects of your life. Here is how understanding your money beliefs can prepare you for a fulfilling retirement.

Money Beliefs 

 

Money beliefs systems are ideas, thoughts and feelings that individuals towards money that can impact on their behaviour. Everyone has their own money beliefs, which have the potential to be vastly different from each other. Once you identify your money belief you have the ability to replace it for another. These money beliefs may have derived from past experiences, parental, peer, education or even media influence. 

Protective Vs Liberating beliefs 

 

Protective beliefs are used to protect yourself or others from something you are unsure or afraid of. These are also known as limiting beliefs, which can have a large impact on your day to day life in the lead up to your retirement. This has the potential to restrict your behaviour when it comes to the handling of your money. On the other hand liberating beliefs depict fearlessness in your money behaviour. 

A World Of Possibilities

When you are open to the idea of possibility, what you once thought was impossible becomes possible and has the potential to be probable. Becoming aware of your beliefs can be liberating and improve your financial situation. Being open to new possibilities and money behaviours can help to prepare yourself for retirement. 

Shifting Perspectives

When it comes to generating wealth and increasing net worth, shifting perspectives can take an individual from a fearing scarcity to thriving. Feelings of hope and gratitude span from beliefs that are freeing. These feelings could include:

 

  • My past choices don’t control my future
  • I have choices 
  • I create my own reality
  • My future is full of opportunities

 

It may be beneficial to turn truths back into beliefs. For example instead of saying “I should save and invest more money for my retirement” give “I could save and invest more money for retirement”. Utilising ‘could’ suggests having options and returns you to the state of financial freedom, choice and possibility. Your focus shifts from the improbable to the very much possible. Altering your money mindset may be the key to adequately preparing you for retirement. 

 

5 Common Money Beliefs

 

Understanding common money misconceptions can assist you in identifying your money beliefs. These misconceptions are the direct result of programming that has been passed down for generations. Often based on past experiences of ancestors and such beliefs may not share the same effectiveness or productivity in modern society.

  1. High Income Leads To High Wealth

 

The assumption that wealth is created by a high income but there are endless examples where this theory is redundant. Therefore this is not a money truth but only a belief. Often high-income earners have a sense of abundance and are the least effective wealth creators. With the outlook that they can always make up the money at a later date. High spending can lead to low cash flow.

  1. Low Income Leads To Low Wealth

 

This is the complete opposite of belief 1, as many low-income earners have generated substantial wealth. They are often more effective with the income they earn. Vision, purpose and desire can lead to building plenty of wealth.

  1. If I Work Hard I Deserve To Do Well Financially

 

The word ‘deserve’ insinuates that you are owed something. By waiting for something that you deserve you lose your power and enter financial insecurity. Financial rewards come to people who look after the money that enters their life. The amount an individual earns is only as useful as the way they look after it.

  1. More Money Makes You Happier

 

There are people on both sides of the wealth spectrum that are happy. Once a certain level of wealth is reached, more money isn’t linked to increasing happiness. Happiness is internal and is reflected in your outer actions and world.

  1. Financial Standing Increases Social Standing And Self Worth

 

Having the latest and greatest of everything has the potential to lead to high expenditure levels. This can have a lasting impact on the ability to generate sustainable wealth. This cycle could lead to debt that can affect the amount of money you have to invest to build long term wealth for retirement. 

 

Talking about money and your money beliefs has the potential to have a positive impact on your personal development and financial planning for retirement. Shifting your perspective on any limiting beliefs about money opens up a world of possibilities. This may allow you to save money and invest more effectively for retirement. 

 

Identifying and understanding money beliefs had the potential to adequately prepare you for retirement. If you would like to discover more strategies for retirement planning, you may want to submit an enquiry and consult a Wealth Specialist at Ethica.