How to change your money mindset in lockdown

When will this be over? That’s the question we keep asking ourselves, and there are no obvious, easy answers. Such uncertainty can take a huge toll not just on our overall mental health, but on our ability to cope financially too. You might feel disorientated and overwhelmed, and anxiety about the future might make you shy away from important decisions and getting a grip on stuff.

Yes, the pandemic has brutally simplified our lifestyles, with many people finding spending harder and saving easier. But others have never felt more out-of-control and helpless when it comes to their money. Not everything can be solved by a change of attitude – it’s important to get funding and support when it’s available – but it may be worth looking at your money mindset and asking if it’s helping or hindering you.

If you want to change your money mindset in lockdown, here are 6 ideas that will help you turn things around.

Main image courtesy of Morgan Housel, author of The Psychology of Money

1. Friend your finances

Resolve to get to know your finances in a non-judgemental way. Imagine they are your friend and treat them accordingly. If you wanted to get to know someone, you wouldn’t criticise them and make negative comments, would you? So, ask yourself: how can I improve my finances without beating myself up?

Everybody makes money mistakes – including me. You’ll never get to a point where you’ll be unambiguously brilliant with your finances. This whole area is too complicated to completely master. But people who have a healthy attitude to money accept their mistakes, learn from them and don’t make finance a taboo area in their life. You can reach that point too by engaging more with your money, and doing so in a positive, pragmatic way.

2. Prioritise your financial wellbeing

We are now starting to understand that financial wellbeing is essential for a life well lived. It needs to be a priority in all our lives, right up there with eating well and exercising. And ultimately, your lifestyle is a reflection of your priorities and values.

If you make time for your money, it will very quickly start to reap rewards, opening up opportunities in the long term and giving you a greater peace of mind. Make that choice to be the boss of your spending – otherwise, you’re letting your influences, environment and peer group run your life and call the shots on your behalf. If you struggle to find time for yourself amid working or family responsibilities, always remember that you can’t pour from an empty cup. Putting yourself first isn’t selfish – it’s the responsible and grown-up thing to do.

3.  Make time for your money admin

Why do so many people end up financially coasting through their twenties and thirties, only to realise in their forties that they should have taken certain decisions far sooner? Often, it’s because people don’t actively make time for their finances.

We often believe that our money will take care of itself, and that’ll be clear when the time comes to make some active choices. Unfortunately, that isn’t how it works! It’s up to you to make those decisions and if not now, then when? In truth, there never is a better time than now and lockdown presents a rare opportunity to establish a regular budgeting routine and to do some homework on the big financial products you need, like pensions and investment accounts.

4. Clarify your priorities with my five S words

Your finances are a mirror of how you REALLY spend your time and what matters to you. I would make a list of the five things long-term that you really want out of life and five things that you value in the here and now. And keep the list to five each, which may sound really difficult, but it forces to clarify what matters.

Then match up your two lists with the following 5 words: settle, save, strive, share then spend. ‘Settle’ refers to your debts – you can’t move forward with your goals if you’re paying money towards chronic debt. ‘Save’ is obvious – this will allow you to achieve short-medium term goals. ‘Strive’ is about aiming for a better future, which is why you need to find space for investing and a comprehensive pension strategy. ‘Share’ is about donating to charity, or investing your resources in others to make a difference. And finally ‘spend’ – the culmination of all your hard financial work, allowing you to enjoy life’s pleasures guilt-free.

5. Supercharge your motivation with holistic goals

If you make ‘being better with money’ your sole goal, you’re going to falter. It’s far better to tie it in with another goal to supercharge your motivation. So for instance, walking/running and cycling more will save you money AND boost your health AND reduce your carbon footprint. Selling your clothes online will earn you money AND declutter your house AND avoid clothes being needlessly put into landfill.

6. Write down your financial anxieties before bed – then break it down step-by-step

People can get overwhelmed by their money problems, particularly when the solutions don’t seem obvious. A great strategy that I’ve been following for some time was originally suggested by Chloe Brotheridge in The Anxiety Solution: she suggests having designated ‘worry time’, and keeping a notebook where you write down all your worries especially for worry time.

You tell yourself: “I’m going to worry about this in worry time!” You may find that once worry time comes around, a solution will have presented itself and/or you just feel less stressed about it. If you are still worried about something, and you know you need to do something about it, write it down before bed and tell yourself: “I’ll sleep on it and think of a solution in the morning.” Often, a good night’s sleep and a fresh day makes all the difference.

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