11 Mindsets That May Actually Be Hurting Your Financial Progress

To change your finances, you’ll first need to change your thinking.

A woman sitting on her sofa smiles as she looks at her credit card and holds a tablet.
(Image credit: Getty Images)

The way people think about money can have a greater impact on their financial success than they may think. Whether it’s the way you were raised or a belief that you have come to over time, the mindset that you develop around your finances has a direct influence on the actions you take with money and your behaviors surrounding it. These beliefs can be positive or negative, truthful or a lie — but how can you tell the difference?

Below, the financial experts of Kiplinger Advisor Collective list some of the most common money mindsets people have that may actually be hurting their progress with money, detailing not only the reasons why but also how they can change and finally get their finances in order.

'It's either all or nothing.'
“Having an ‘all or nothing’ money mindset is unhelpful and hinders financial progress. It’s common to discount smaller amounts of money as not being enough. Initially, however, creating the habit is more important than the amount. Whether saving, paying down debt or investing, take the mindset of ‘some progress is better than no progress’ and do what you can. As more money is available, you can increase the amount.” — Chianté Jones, Dollars and Change

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'I can't afford that.'
“‘I can't afford that’ is a prevalent and harmful money belief. You'd think having this mindset means you don't overspend, but it often leads to spending more to prove something to yourself and others. It comes from a place of scarcity and can make people purchase things to fill the void. Here's a money trick: Start saying, ‘I don't want that because I really want more of this.’” — Jason Vitug, Phroogal

'More money will solve all my problems.'
“One common harmful money mindset is the belief that ‘more money will solve all my problems.’ This mindset is harmful because it can lead to neglecting the non-financial aspects of life. One example of this is prioritizing earning and accumulating wealth at the expense of relationships, health and personal fulfillment. It's important to find a balance between money and happiness.” — Greg Welborn, First Financial Consulting

'I'll just use a card to pay because it's easier.'
“People’s propensity to use debit or credit cards for purchases instead of checks or cash leads to unnecessary purchases because using a card is so easy and doesn’t feel like you’re spending money. To solve this, start paying with cash and checks. It will require a little more work but will psychologically help you make better purchasing decisions. Record all transactions to help with budgeting.” — Dennis Futch, The Tax Shop

'It's OK to carry a balance on my credit card.'
“Many Americans are carrying balances on high-interest credit cards. This harmful money mindset can lead to long-term financial struggles. When individuals consistently carry balances, they accrue high-interest debt, making it harder to achieve financial stability. This not only drains resources but also perpetuates a cycle of dependency on credit, hindering savings and investments for the future.” — Howard Dvorkin, Debt.com

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'Spending less equals saving more.'
“One harmful money mindset is the belief that ‘spending less always equals saving more.’ This mindset can limit financial growth by ignoring the importance of earning more and investing wisely. To change this mindset, focus on creating a balanced approach that includes budgeting for savings, investing in professional growth and exploring opportunities to increase income — not just cutting expenses.” — Amrita Choudhary, Wasabi Technologies

'It's better to not take risks and to play it safe.'
“Fearing uncertainty is a significant hindrance to financial prosperity. This can lead to you not challenging yourself, which results in never knowing what could have been. While it’s common to feel unsure about stepping out of your comfort zone, it’s essential to do so in order to see growth. The best way to alter this mindset is to have better financial discernment on which risks are worth it.” — Justin Donald, Lifestyle Investor

'I have to keep up with the Joneses.'
“The 'Joneses' money mindset detracts from both wealth and well-being. This mindset can be harmful through comparison, explanation or ‘keeping up.’ If you run your journey at your pace without explaining your means, preferences and financial plan, your pockets and spirit will benefit simultaneously.” — Dr. Preston D. Cherry, Concurrent Financial Planning

'I have plenty of time to save for retirement later.'
“One mistake people make is thinking they don't have to start saving for retirement now. They assume that they can wait until later. But, the reality is, the sooner they start saving for retirement, the better.” — David Silversmith, Eisner Advisory Group LLC

'Being a renter is better than owning a home.'
“There is a lot of energy put behind not being a homeowner and instead being a renter. The timing of homeownership is different for everyone, so a lot needs to be assessed. But, renting for the rest of your life is an endless expense with zero ownership of an asset that more often than not appreciates in value and contributes to net worth. A home also has lifestyle and emotions tied together with the financial aspects as well.” — John Bodrozic, HomeZada

'Credit cards are like free money.'
“Credit cards are not an alternative source of income! They are an excellent resource if cash is in an account earning income. They can be used to track expenses, their savings offset any fees, and your charges earn some sort of benefits. Your benefit in using a credit card, however, is predicated on you paying the balance in full every billing cycle.” — Deborah W. Ellis, Ellis Wealth Planning

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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

Kiplinger Advisor Collective

Kiplinger Advisor Collective is the premier criteria-based professional organization for personal finance advisors, managers, and executives.