Updated: Oct 14, 2022
3 techniques to become a financial optimist today
Optimists have an edge in many areas of life, not only health and work but also in the financial field, becoming financially optimistic. A recent study has shown that there is a positive correlation between being optimistic and financial well-being.
If you want to improve your financial well-being and become “financially optimistic“, here are some easy techniques to become a financial optimist and ace your financial life.
What is Optimism?
Before talking about how to become a financial optimist, we should focus on what is meant by optimism. We can define optimism as the ability to face difficulties with courage and with the awareness that one’s actions can make a difference. For optimists, in fact, the attitude or mindset is a winner.
Growth Mindset vs Fixed Mindset
We must distinguish between a growth mindset (dynamic mind) and a fixed mindset (static mind). The distinction is the work of Carol Dweck, a psychology professor at Stanford University. According to Dweck:
the fixed mindset is the belief that everyone’s abilities are carved in stone and predetermined at birth;
the growth mindset is the belief that everyone can develop and improve their skills through commitment and perseverance.
According to Dweck’s research, those who have a static mindset run away from difficulties. They believe they do not have the skills to face them, while those who are characterized by a dynamic mindset face the challenges of life as opportunities to grow and learn.
The importance of a Growth Mindset to become financially optimistic
To cultivate financial optimism, and therefore become “financially optimistic“, it is necessary to evolve from a fixed mindset to a growth mindset. A static mindset, in fact, prevents us from changing habits that hinder us in achieving our financial goals. The reason is simple: the fear of failure.
A growth mindset, on the other hand, leads us to modify our current behaviours by identifying the most effective strategies and actions to improve our financial well-being.
For example, if our financial situation is not flourishing, a useful tool is to keep track of our weekly income and expenses. This simple process will help us become aware of how we spend money and, consequently, identify areas of possible savings.
How to boost your financial optimism?
Another way to fuel financial optimism is to emphasize and celebrate small wins. The basic concept is simple. When you celebrate small progress, all you do is feed the motivation that helps you achieve a bigger goal step by step.
One technique that harnesses the motivational power of small wins is the Snowball debt reduction method. The method involves paying off debts from smaller ones. This technique is effective because it aims to change behaviour by triggering a virtuous and stimulating habit. The progressive repayment of debts, in fact, increases the motivation and pushes to continue the plan until it is completely free from the debts themselves.
This technique can also be applied in other financial areas. For example, by setting a monthly spending or savings limit, broader long-term financial goals can be achieved.
Consider moments of crisis as temporary.
The optimist faces difficulties in the belief that they are temporary and that his actions can give a positive turn to events. In these cases, it is important to have a positive internal dialogue.
An exercise that I recommend, in this regard, is to make a list of the most demanding challenges you have faced in life (at least three) and for each of them identify at least one teaching that you have received. This will help you face the next difficulty with courage and trust your skills.
From a financial point of view, you can prepare yourself to face possible crises, such as job loss, by setting up an emergency fund in time.
Surround yourself with optimistic people.
Jim Rohn says that “We are the average of the five people we frequent the most.”
The people with whom we spend our time have a great influence on us, on our behaviours, thoughts, beliefs and values.
Choose carefully the people you want to meet. Surround yourself only with those that share your own values and that can support you on your path towards improving financial well-being.
Are you ready to become financially optimistic?
With this article, I wanted to provide you with some simple tips to develop an optimistic attitude in managing your finances. It is now up to you to put them into practice.