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Every person has a money story. You can tell whether your money story is empowering or disempowering simply by observing how much struggle (or lack thereof) you experience in the financial areas of your life. I believe the current recession we are experiencing will only serve to magnify each person's current mindset. After all times of higher stress always serve to separate the pack.
At all times your finances are the result of your money mindset and are a reflection of your personal relationship with money. This fact holds true whether you earn millions or minimally. Money is like a mirror into our beliefs and thought patterns.
Dana at Financial Independence for Everyday People puts it this way:
Your money mindset boils down to two pairs of emotions: fear/opportunity and scarcity/abundance. I like to use teeter-totters to illustrate the trade-offs between different alternatives.
When we feel fear we contract. That means we close off to possibility and opportunity. Right now I see so much fear as people talk about the recession and the media goes wild with its panic-inducing coverage that people are closing themselves off to what could be possible. For instance, the minute someone declares that the economy is in tough times, people start milling around and shifting their conversations to what they can't do. I can't go on vacation. I can't afford gas. I can't afford to hire you right now. I can't afford to invest in myself until I have the money. I can't, I can't I can't. Well, what you focus on expands.
Now I'm not saying the answer is to spend wildly and make the situation worse by getting knee deep in debt. However, the way you think about and approach money will have a huge impact on whether you thrive or simply survive the recession. Whether you think you can, or think you can't - either way you are right. That's right, we will create exactly what we are committed to. So, if we're committed to struggling with and having not enough money that is exactly what we'll create.
The principle applies whether you are trying to build wealth, make a career or personal change, or get out of debt. Debit-Free Mom says in "Understanding Your Money Mindset"
What holds many people back from being debt-free is that they really don’t believe it’s possible. This deep-rooted doubt sabotages their efforts to become truly financially fit. You can write budgets every month, but if you can’t get past what’s really holding you back, you won’t get one step closer toward paying off your bills. You first need to understand your money mindset.
It can be hard to shift your thinking when the rest of the world is running around like Chicken Little screaming "The Sky is Falling". Do we simply whip ourselves into a frenzy? I have to wonder. In "Is There Such Thing as Recession Proof?" PunditMom shares:
While they're not using the lingo of the Great Depression, the blogger buzz is growing about how to manage as the stock market continues to slip, banks foreclose on mortgages and families think twice, or three times, about buying necessities like bread.
OK, so we're freaking out about buying bread, yet I see no shortage in the number of people lined up at Starbucks for a $4 latte, at the movies, or talking on new fancy cell phones. Perhaps this is the world's way of creating a bizarre little balance between excess and struggle?, I don't know.
What I often find missing in this conversation is that sometimes you need to spend money in order to save money or earn more in the long term. It is called investing in yourself. Self-development, education, and smart spending can earn you big dividends in the long run. Short-sighted cost cutting and engaging in worry and fear only serve to self-fulfill your own doom and gloom philosophies (remember that mindset and limiting beliefs I talked about earlier?). Even from a business standpoint it only makes sense to cut costs if it won't hurt you long term and you still need to get out there and invest in your business so it doesn't die on the vine. Small business expert Karyn Greenstreet shares in her article "Coping with a Recession":
Cut costs, but only if it won't harm you later. The first thing business owners think they must do it cut costs. But don't cut
