If you scored low “Financial beliefs” category in Financial IQ Test for Parents, please check the activities below!

Financial beliefs is the most sensitive part of the Financial IQ test for Parents. Why? Because many of us do not consciously understand what our financial beliefs are. Others of us may be aware of our beliefs but may deny that these beliefs have anything to do with our financial success. Many of us also feel strong rejection inside when somebody starts talking about beliefs and positive thinking.

Interestingly, the most comments I got from people were related to financial beliefs. E.g. “I would never agree that rich people are rich because of hard work.” Or “Most people are rich because of luck or because they inherited riches from their parents! Look at statistics!”. Or “I know quite a few rich people. They are greedy and arrogant.”

I have to stop here and say that I do not intend to convince you of what is true. Therefore, I will not give facts to prove that certain financial beliefs are good or bad. Actually you can find proof for anything, that is why there are so many religions and political parties.

My point here is that your financial beliefs shape your reality. Therefore, if you believe that you cannot become rich by hard work, most probably you will not work hard. If you believe that you can only become rich by inheriting riches from your parents and you have not inherited anything, chances are you will not do your best to become rich.

Everything is built on beliefs. One belief is enough to hold you back.

Bodo Schafer

Why should the intangible belief change the tangible financial REALITY? Because this is how our subconscious mind works.

Also, your financial beliefs form the reality of your kids. You are passing your beliefs to your kids. If they want to change these beliefs in the future, they will have to work hard. And change is painful. Do you want that for your kids?

There are quite a few limiting beliefs about money. I have grouped them in 5 broad categories.

Beliefs about your financial abilities

• I don’t know how to deal with money
• Everything is predestined
• If I was born in poor neighbourhood and family, I cannot be rich
• I am unlucky
• I never had a discipline to save
• I do not deserve more money

Beliefs about rich people

• Money ruins one’s character
• I can only get rich by being tough and greedy
• If I become rich, I will lose real friends
• If my children grow up rich, they will be weak and will become junkies

Beliefs about money itself

• Money is the root of all evil
• Money isn’t everything
• Money is dirty
• Having a great deal of money causes problems
• I can’t take money with me
• Money is a limited resource
• Whenever I obtain money, someone else loses it

Beliefs about the price of becoming rich

• Getting rich will be at the expense of my family
• Becoming rich would ruin my health
• If I wanted to have more money, I would have to change myself so much that my partner would not love me anymore

Need for money

You might have a huge need for money:

• Money is a measure of my success
• I am a complete failure without money
• Money isn’t everything but without money everything is nothing

… or you may deny the need for money:

• If I wanted to I could become rich but I do not desire that
• There is more important things in life than money

Both beliefs won’t help you too much.

Remember that you cannot convince yourself of something that does not make sense to you. Therefore, I have prepared some exercises for you if you decide to change your (and your kid’s!) financial beliefs.

Top 3 things you could do right now

1. Examine your current financial beliefs

• Go through the list of limiting financial beliefs and write down the beliefs you have. Do you have some other beliefs that are not listed here? Remember – one belief is enough to hold you back!

2. Ask yourself why you hold these beliefs

• Remember experiences that formed your financial belief. Who influenced you in forming this belief (parents, teachers, spouse, friends, colleagues)? Are these people in the position that you would like to be in?
• Ask yourself the following 5 questions and write down the answers:
  1. Why is the belief not true?
  2. Did you learn this belief from rich people?
  3. What would be the price for engaging in this belief further? How would that impact my family and people I love?
  4. How would my life improve if I change my belief?
  5. Think of a related positive belief.
• Think of experience that could form the positive belief. Start acting now!

For example, I have a belief “Getting rich will be at the expense of my family”. I.e. I think that getting rich requires a lot of hard work. As I want to see my kids growing up, I choose not to become rich.

1.Why is the belief not true?

It is not true, as I know quite a few rich people who have more time than I have now.

2. Did you learn this belief from rich people?

No. I learned it from my own experience – the more I work, the less time I have for my family. I also learned it from people who work very hard and don’t see their kids growing up. They say that they do not want to become rich as that would mean that they spend even less time with their family.

3. What would be the price for engaging in this belief further? How would that impact my family and people I love?

If I do not change this belief, I will continue working hard to have ends meet. I will not become financially free and that would mean that after 10 years I will be in the same situation as I am now: working hard, having little savings and little time for my family.

4. How would my life improve if I change my belief?

I could get rich and I could have more time with my family. It would be great!

5. Think of a related positive belief.

“Getting rich would benefit my family.”

Now, you have to think of experience that could form this positive belief. In this example I should find a person who is rich and who has a wonderful family life. Get in contact with him or her – the more interaction you have with that person, the better.

3. Find at least 1 rich person who you admire and read his or her biography in the upcoming month

Acting like a success can help you be a success. And biographies are really inspirational! I read biographies regularly to stay on track with my goals. Some of the recommended biographies of business leaders are below:

Steve Jobs by Walter Isaacson

Elon Musk by Ashlee Vance

My Life and Work by Henry Ford

Shoe Dog by Phil Knight (creator of Nike)

Alibaba: The House that Jack Ma Built by Duncan Clark

Buffett: The Biography by Roger Lowenstein