3 Mindset Shifts That Will Change the Way You Think About Personal Finance

I like to run for exercise. Running can be done just about anywhere, it doesn’t require equipment, I can do it solo, and there’s no special ability required (I just adjust my pace accordingly).

In fact, I’ve ran five half-marathons (none of them very fast, mind you). When I train, I work on improving my physical endurance, my speed, AND my mental fortitude.

Here are the three mindset shifts that have revolutionized my running performance AND, interestingly enough, my financial well-being.

Mindset shift #1: IT’S ONLY FOR A SHORT WHILE

“One more minute. One more lap. One more effort. And that is ALL!”

When my breath is fast, my heart is racing, and my legs feel like they can’t take any more, this what I repeat to myself, over and over in my head: “JUST. ONE. MORE. MINUTE!”

A minute is a fraction of an hour. A lap is a fraction of a mile. A set is a fraction of the whole workout. A workout is a fraction of your day. It’s totally doable, right?!

In late 2017, I desperately needed to rebuild my bank account up after being out-of-work. When I decided to rent out my 3-bedroom, 2-bathroom house for the Arizona 2017-2018 tourist season, I had never done such a radical thing before. All I had to do was get my house ready to rent, find another place to live, and then let other families into my home and my space.

It wouldn’t be simple, easy, or convenient, but it was ONLY TEMPORARY. The rental income would go a long way towards my financial goals.

So, from Christmas to Easter, I moved into a 430-square-foot studio casita about 20 minutes away from my house. It had no garage, no dishwasher, no walk-in closet, no bedroom door, no desk, all things I was used to. I told myself, “It’s only four months, in the grand scheme of life. First-world problems!”

I parked in the alley. I did my own dishes in the sink. I made do with fewer clothes. It got real cozy when a friend from college came to visit. And I worked from the kitchen table.  Four months flew by. And you know what? I adjusted. To fewer amenities. To less space. To having fewer belongings. And then, there were unexpected perks: like sharing the yard with the family whose kids played with my dog Penny, and being able to explore a new neighborhood I really liked. 

What initially was hard, what was originally a downgrading… wasn’t anymore. (I actually rented out my house the following few years too!)

The truth is, there are lots of radical ways to improve your financial outlook. They might not be simple, convenient, or easy, but they’re not meant to be forever. Me, I’ve gotten second jobs, roommates, and I’ve traded down my car instead of trading up, and I’d keep in mind: it’s a blip, a fraction, a moment. I can make an effort for a week. For four months. For a year. We can do ANYTHING if we think it short-term.

Mindset shift #2: TRACK PROGRESS WITH INCREMENTAL GOALS

“I’m not running 13 miles… I’m running one mile, 13 times.”

Before I ran my first half-marathon, I couldn’t fathom the idea of a 13.1 mile run. It was SO FAR. It would take SO LONG. I would be SO TIRED. 

I was in an athletic clothing store to pick out a new sports bra and shared my concerns with the saleswoman. She told me about an approach which apparently, a lot of good runners use: to think of the run in increments, and to run it in increments too.

On race day, I decided that I would run a mile, then walk a minute. I wouldn’t think about the finish line, I would only think about making it to the next mile marker — a much more attainable goal — and once I got there, I looked towards the next equally attainable mile-marker. And then I did it again, and again, and again, until I finished the race. 

Instead of being frustrated that the finish line was so far away… I would feel a sense of victory for completing each mile. And each brief breather gave me some “oomph” to start the next one-mile-run afresh. 

You can approach your finances in the same manner. Say you want to save $10,000, but you’re feeling discouraged because it feels like an impossible task. Instead, think about saving $1,000, 10 times. Or $500, 20 times. It’s up to you! And each time you meet your goal, celebrate. You’re on your way. Then do it again, and again, and again. 

I used this practice when I was saving up cash for my sabbatical. While it’s helpful to think about the big picture, the big picture in smaller increments keeps my head in the game, and it can do the same for you.

Mindset shift #3: THE OPPORTUNITY COST OF LIFESTYLE CREEP

“Calories out don’t equal calories in.”

There’s a misconception with exercise that if you burn 1,000 calories, you can eat 1,000 calories. But if you’re trying to maintain or lose weight, that will backfire. 

The metaphor is a bit backward, but I think you get the idea: just because you get a hypothetical $5,000 raise doesn’t mean you should go and spend $5,000. 

As I moved up in my career, and my friends moved up too, I felt the pressure to show off with what I drove. So, in 2015, rather impulsively, I bought a 2013 Infiniti G37 hardtop convertible. The Infiniti’s sticker price was somewhere around $5,000 more than what my trade-in was valued, but I end up paying so much more than that: “luxury” brand vehicles take premium gas, have higher maintenance costs, are more expensive to insure, and get worse gas mileage. Plus — interest! So even though I was only financing a “little” bit more, my monthly auto-related costs shot up to $800 a month. I could barely afford anything else!

One year later, I traded in the convertible for a Honda Civic. (It was actually a boyfriend who urged me to downgrade into something more affordable, which I resisted and begrudged at first.) My monthly auto-related costs were cut in half, freeing up $400 a month. And a few months later, I bought myself a cheap trip to Costa Rica with some of the money I had saved — believe me, I wasn’t missing A THING!

(These days, I’m in a paid-off Honda CR-V, and I’m going to be driving it for a LONG TIME. Financing a car is, in my opinion, one of the biggest self-saboteurs to personal finance — avoid it if you can!)

I can’t go back in time, but a better use of that hypothetical $5,000 would’ve been to invest it. In that scenario, I’d have the magic of compounding — my $5K would earn me money instead of cost me. A missed opportunity!

In summary…

Dollars and cents matter, but the right mindset is crucial when it comes to digging out of a financial rut and improving your finances. Keeping the following in mind has made all the difference for me: 1) radical change isn’t permanent (and can have radical results!), 2) incremental goals are more attainable, and 3) lifestyle creep comes with an opportunity cost to something better.

And truthfully, these mindset shifts apply to any kind of challenge or intensive effort!

It goes without saying: to accomplish anything difficult, you need to want it. You want to run the race and finish, no matter how physically and mentally trying it is along the way. 

Will I be running a marathon anytime soon? Absolutely not. I like to joke, “No thanks; I’m only half-crazy.”

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