The Financial Growth Mindset

In the previous three blog posts, we have seen how to start from a Financial Health Check to implementing your goals using a Macro Budget.

How health and finances are linked

How to develop SMART goals in Personal Finance

The Macro Budget – Ultimate Financial Execution

In this post, we will look at the next step – the Growth mindset in personal finance.

This step is important because this is the last step which completes the loop but does not stop there. Through a growth mindset, your Financial metrics improves and grows.

How does Financial Growth Mindset help in your life?

It gives you more freedom as you build assets, funds and passive cash flow.
It broadens your mindset to new possibilities.
You start thinking big in every aspect of your life.
You can take more risks in life and career.
You can give more and be generous.

What are the steps to develop Growth Mindset?

You cannot talk about Growth Mindset without a systematic process. Here are 3 steps leading to the Growth Mindset.

Find and calculate your Financial Metrics. This step shows what are the strengths and weaknesses in your finances.
The weaknesses can be converted into SMART goals and future goals can also be mapped to the SMART goal process.
Put the SMART goal process into implementation via a Macro budget, where there are separate buckets of money for different goals.

Now you can convert these goals and buckets into dreams. For example, one of the goal could be Financial Freedom in next 5 years. So there is a bucket to save and invest for this.

Similarly there could be another bucket for leaving job and sustain yourself for 18 months while you try out something new.

Also, as these savings buckets are filled and used responsibly, you will see that the Financial Metrics will improve on its own. That’s where you can create more goals as money is freed up from paying off debt, increasing your income and reducing unplanned expenses.

Here are the steps you can take in the Growth Mindset stage: