What is Mindset? And How Can It Help You Go for Gold and Manage Money Better?
By: Lizzie Letsou and Kaitlyn Ranze
1. the established set of attitudes held by someone.
With the Tokyo Olympics fast approaching, mindset is on our mind. What makes up an elite athlete? How did they get to the pinnacle of international competition, and what differentiates “naturally gifted” athletes from the ones that actually meet their potential?
How can this translate to overcoming challenges in everyday life? Carol Dweck, a professor from Stanford University, believes the answer boils down to mindset.
The right mindset can keep you motivated.
“I think there’s always a lot to learn from a win and a loss, but a loss makes you feel it a little bit more. A loss is always a really good self-reflection period,” explains Maggie Steffens, three-time water polo Olympian, and gold medalist. “Instead of thinking of it as a pity party, I think it’s a really good way to reflect on the things that you can learn from yourself and from your teammates.”
Rather than viewing a loss a reason to quit, Maggie frames her losses as a learning experience. It actually motivates her to keep going.
How can we take this framework of mental resilience to empower our money moves?
1) For starters, persistence is key.
Let’s take a look at how Maggie’s mindset enables her to be persistent: “I also use [loss] as fire. If you like the feeling, maybe this isn’t the sport for you or competition isn’t for you. But if you don’t, try to remember that and feel it, so that you know when you’re not doing so well the next game, it gives you a little bit of fire and energy.”
In the context of investing and your money, hard work pays off.
And we’re talking more than working two jobs or a massive amount of overtime. Persistence in terms of investments is a major factor in wealth generation.
“Although short-term volatility swings can be difficult to stomach, it’s important for long-term investors to persevere,” Franklin Templeton writes. “While it may be tempting to pull out of the stock market, investors may miss out on a potential market rebound and opportunity for gains while they are on the sidelines.”
2) Learning is part of the journey
Just like Maggie wasn’t born knowing how to swim, defend, or make goals, we weren’t born knowing how to manage money. Part of having a growth mindset is remembering that skills can be learned. Specifically, financial literacy is learned. We aren’t born understanding the power of compound interest, difficulties of refinancing, or the basics of investment. With a growth mindset, you believe in your ability to acquire knowledge about personal finance and overcome obstacles and losses.
Pro Tip: Take the quizzes inside the nav.it money app.
3) Building better money habits
Athlete performance isn’t contingent upon and restricted to solely game time. From eating well to exercising, daily practices and thought patterns turn into habits that increase overall well-being and fuel performance. The same is true for your financial habits where daily practice is key.
Instead of feeling restricted by budgeting, suffering from the negative feedback loop of avoidance and indulgence (for example impulse shopping), a healthy mindset helps create systems for positive financial outcomes – like making coffee at home. If we focus on the opportunity to improve and change, we shift the mindset, modify behavior, and improve spending habits.
All of these tenets boil down to your money mindset
The concept of “money mindset” is actually pretty simple. Nonetheless, it’s a concept that is central to Nav.it’s philosophy about money.
Nav.it defines money mindset as: “Your overall feelings toward your money. It impacts how you make financial decisions every day and can either accelerate or derail achieving your financial goals.”
Easy as pie, right? But, why is understanding your money mindset so important, though?
Master your mindset, master your money
According to Nav.it CEO and Founder Erin Papworth, mastering your money mindset is the first step on your path to financial health: “We believe taking the time to check in on your mood throughout the day, week, month, gives you a chance to reflect on if your emotions alter your financial picture and if trends emerge that reveal something deeper, you can change.”
In other words, understanding how you feel about your financial decisions can actually help you make better choices in the future!
Feelings can be expensive
Alright but how does Nav.it’s Money Mindset feature actually help me make those amazing financial choices? Let me break it down for you: (1) you open the app, (2) you submit your “money mood,” and (3) Nav.it tells you how much money you spend, depending on what mood you’re in.
So, with this feature, you can easily decipher your own behavioral and financial patterns, which is a super powerful tool for changing money habits!
Nav.it will also tell you what your “least costly” and “most costly” moods are. Let’s say you always get the urge to online shop when you’re feeling excited — Nav.it can help you recognize and rectify habits like that!
As a writer and DJ Kenneth points out, “I tend to spend. . .let’s just say larger sums of money when I’m happy with work, but spend next to nothing when I’m anxious about my health. As they say, if you knew better you’d do better and this helps you know yourself so you can make stronger, more insightful money moves.”
Putting things into perspective
Okay, that all sounds great…but is that all there is to it? Money mindset just helps me evaluate my choices? We’re glad you asked! And the answer is yes…and no.
The great thing about Nav.it is that it’s an app that encourages you to put things into perspective. So, obviously, we want you to focus on your own finances and avoid comparing yourself to other people. However, it can be really useful to understand how your financial attitudes and behaviors match up (or don’t!) with your peers.
Not to mention the power of a team is endless.
If we’re hurt, or if we’re mentally struggling, I know we have a team behind us and with us, and I’m really grateful for that. I could not be an individual professional athlete, I would seriously struggle. So being a part of a team is really important to me and to what we do.
Maggie Steffens, 2x Olympic Gold Medalist, Water Polo
That’s why Nav.it has something called a “Community feed,” where you can find out a lot of info about other “navigators’” money moods. Sometimes it’s enough just to know you’re not alone! You can also find out about others’ moods when you submit your current money mindset!
Athletes have teammates, coaches, trainers, psychologists, and an endless number of fitness tracking tools to increase their performance. We’ve built nav.it so that going for gold is easier in your everyday life.