When it comes to helping people make better decisions around money, change is the name of the game. Everyone who works with a financial advisor – even people who seem to have it all figured out – does so because something about their current reality is not going the way they want. Sometimes that's tactical (I want help managing my investments), sometimes strategic (I want help planning for retirement), and sometimes the motivation for change is all about relieving stress and anxiety around money.
But, of course, doing new things can be scary. The old familiar feels comfortable – even if you aren't happy with the results – while new ways of doing, thinking, or being require accepting some uncertainty. And that isn't limited to just your money.
Have you ever started a new daily practice, collaboration, business endeavor, or fitness plan and felt ... less than super confident that you would do a good job? New research suggests that a person's outlook when attempting something new might have a bigger impact on results than you would expect.
A recent study sought to track what happens when people think they are struggling compared to when they think they are doing better than expected. Research scientists gave step counters to two groups of adults and asked them to track their movement. Here's the twist: one group had watches that tracked movement with intentionally inflated step counts and the other had watches that underreported step counts. Both groups did the same amount of work, but the impacts on personal health were widely different.
The people with the under-reporting step count watches experienced lower self-esteem and mood, higher heart rate and blood pressure, and worse eating habits. The group with watches that over-reported steps, on the other hand, experienced happier moods, better eating habits, and an improved sense of confidence and well-being.
Again – the difference between groups was not how well they did, but their perception of how well they had done. The study implies that believing in your abilities tends to lead to better results than believing you will come up short.
Luckily for us, optimism and confidence can be grown and honed through repeated successful experiences, building resilience to allow you to stay engaged longer in a new or challenging activity.
If you’re trying something new – including changing your relationship with money – take perfection off the table. Focus on getting some small wins under your belt instead of obsessing about numbers or worrying about getting everything right. Those wins will help build good habits, making it easier and easier to accumulate positive results.
Here are a few tips to help you build a positive mindset when it comes to improving your financial well-being:
Start small. It's easy to want to take big, bold actions when starting something new, but that can also lead to bigger disappointment (and giving up) with early setbacks. When you're doing something for the first time, aim for actions you know you can accomplish and then add repetitions until it feels familiar.
Celebrate your wins – especially the little ones! Set aside one or two specific times throughout the day to acknowledge things that have gone well. Were you able to set aside an extra $100 this month? That's a win! How about lowering your grocery bill by $5 each week? That's another win! Repeated positive experiences can rewire your brain to associate a new activity with feeling more confident and optimistic.
Put more energy into the positives than the negatives. No matter how motivated and focused you are, there will always be times when your plans just don't work out. Instead of trying to eliminate every little thing that isn't right, double-down on the things that are going well. Perfection is impossible, so don't let it stand in the way of all the good you can do.
Give it time. New activities only become comfortable with time, so expecting results right away can lead to disappointment. Set a goal for a minimum period of time to develop a new habit, like "I will save 15% of my income for the next 3 months," or "I will contribute to my retirement account every month this year."
I'd love to hear what tips or activities have helped you build a positive mindset when trying new things! Send me an email to let me know what has gone well when building new, positive habits.
Timothy Iseler, CFP®
Founder & Lead Advisor
Iseler Financial, LLC | Durham NC | (919) 666-7604
Iseler Financial helps creative professionals remove stress while taking control of their financial futures. As both advisor and accountability partner, we help identify current strengths and weaknesses, clarify and refine your long-term goals, and prioritize understandable, manageable, and repeatable actions to bring long-term financial well-being. Reach out today to take the first step.