Mindset is the first thing I work on in My Money Makeover, and I work on it first for a reason. If you try to fix your finances without fixing the way you think about money, you are pouring water into a leaky bucket. It doesn’t matter what you put in. It will keep draining out.

Your money mindset — how you think, feel, act, and give when it comes to money — was largely shaped before you turned seven. The household you grew up in, what was said about money, what was left unsaid, and what you saw modelled by the adults around you all became the blueprint you have been running on ever since.

The good news is that a money mindset is not fixed. It can be changed. But first you have to understand what yours actually is.

What Is Money Mindset and How to Change Yours

Mindset is Module One in My Money Makeover. I did not put it there because it felt like a nice place to start. I put it there because in every year I spent as a financial planner, I kept seeing the same thing: smart, capable people who had all the information they needed to sort out their finances, and who still couldn’t do it. They knew they should be saving more. They knew the debt was a problem. They knew what they were supposed to do, and they kept not doing it.

The reason, almost always, was not a lack of information. It was the way they thought about money. The story they were running about what money meant, whether they deserved it, whether things could actually change for them. That is money mindset. And you cannot build a solid financial life on top of a mindset that is working against you. You have to fix the leak in the bucket first.

What Money Mindset Actually Is

Money mindset is how you think, feel, act, and give when it comes to money. The whole relationship sits in that phrase. Spending habits, saving habits — those are the surface — the emotions that come up when you look at your bank balance, the beliefs you carry about whether wealth is something people like you can have, the way you respond when money is tight versus when there is more of it around.

Research suggests money mindset is largely determined by the age of seven. That is a confronting number. By the time most of us were old enough to understand what a bank account was, the core beliefs we would carry into adulthood about money were already in place. We absorbed them from the households we grew up in — from what we heard, from what we saw, and just as powerfully, from what was never discussed at all.

The thing I want you to hold onto is this: your money mindset is not fixed. It was formed by your environment and your experiences, and those are things that happened to you. They are not permanent features of who you are. With conscious effort and the right kind of financial literacy, it can change. I know this because mine did.

The Two Mindsets: Scarcity and Abundance

I talk about two types of money mindset. Most people sit somewhere on a spectrum between them, rather than fully in one camp or the other. But most of us lean predominantly one way.

A scarcity mindset is built on the belief that there is never enough. Money is something to be feared, hoarded, or avoided. It leads to decisions driven by anxiety rather than clarity. You might recognise it in the phrase: you can’t take it with you when you go. That belief — that spending is fine because you’ll die anyway, or that saving is pointless because there’s never enough to make a difference — is scarcity at work. So is the opposite: clinging to money so tightly that it cannot move, because spending feels like loss. Both come from the same root.

An abundance mindset works from a different set of assumptions. Money is a tool. It can grow. Financial situations are changeable. Opportunities exist for building something better, and you are capable of doing the work to get there. People with an abundance mindset tend to make calmer financial decisions, take a longer view, and feel less threatened by looking at the numbers.

I want to be honest about something here. Most people who grow up with a scarcity mindset and work hard to shift toward abundance do not leave the scarcity behind entirely. There are days I still have to fight that demon. A bill arrives, or something unexpected happens, and the old voice comes back. The difference is that I know whose voice it is now, and I know how to answer it. That awareness is most of the work.

Where Your Money Mindset Came From: The Quiet and Noisy Household

One of the frameworks I use in My Money Makeover is what I call the quiet household and the noisy household. Understanding which one you grew up in goes a long way toward explaining the money beliefs you are carrying now.

A quiet household is one where money is not discussed. On the surface this might seem like a healthy thing — no arguments, no drama, no conflict. But the quiet household is sneakier than it looks. What you absorb in a quiet household is what is not said. You learn from whether there always seemed to be enough, or whether the answer to ‘can I have that?’ was consistently ‘we don’t have the money.’ You learn from watching your parents manage money in the background, competently and without explanation, which means you were never taught. A quiet household can produce adults who are anxious around money without quite knowing why, who avoid their finances because they were never shown how to face them, or who carry a vague sense that money is something other people understand better than them.

A noisy household is one where money is a regular presence in conversation. This can go two ways. In its positive form, money is discussed openly: budgeting, goals, how things work, what costs what. Children in these households grow up understanding that money matters and that talking about it is normal. In its more difficult form, a noisy household is one where money is the source of conflict. Arguments about what is not there. Tension around bills. Money as a charged, emotional subject. Adults from these households often have a complicated relationship with financial conversations — they know money matters, sometimes too well, and the associations are heavy.

Neither household produces a perfect money mindset. Both leave their mark. The point of understanding which one you came from is that it gives you the context to see your current beliefs for what they are: inherited patterns, picked up in childhood, running quietly in the background. And once you can see them, you can start to work with them.

How to Start Changing It

The first step is awareness. Before you can shift a money belief, you have to know it is there. Most people have never actually articulated what they believe about money — they just act on it. Take a moment and write down the first three things that come to mind when you think about money. Whatever comes up, that is your starting point.

The second step is to separate what is true from what is a story. If you believe you are just bad with money, that is a story. It might have roots in real experiences, but it is a conclusion, and conclusions can be examined. Ask yourself where that belief came from. Was it something you were told? Something you watched? Is there actual evidence that it is permanently true, or is it a pattern that formed in specific circumstances?

The third step is to replace the information gap with something real. A huge part of why scarcity mindsets persist is that people genuinely were never taught how money works. They were never shown how to build a budget that holds, how super grows, how small consistent actions compound over time. Financial literacy is a skill. It can be learned at any age, and learning it changes the way money feels.

I built My Money Makeover for exactly this reason. Module One is mindset because I wanted to give people the context before we got to the mechanics. The leaky bucket needs to be fixed first. Then we fill it, and we keep it full.

Frequently Asked Questions

What is a money mindset?

Money mindset is how you think, feel, act, and give when it comes to money. It covers your spending and saving habits, the emotions that come up around your finances, and the beliefs you carry about whether wealth is something you can achieve. Research suggests money mindset is largely shaped by the age of seven, based on what you absorbed from the household you grew up in.

What is the difference between a scarcity and abundance mindset?

A scarcity mindset is built on the belief that there is never enough. It leads to financial decisions driven by anxiety rather than clarity. An abundance mindset sees money as a tool that can grow, and financial situations as changeable. People with an abundance mindset tend to make calmer decisions, take a longer view, and feel less threatened by looking at the numbers.

How does your childhood affect your money mindset?

The household you grew up in — whether it was a “quiet household” where money was never discussed, or a “noisy household” where it was a regular topic or source of conflict — shaped the money beliefs you carry as an adult. These inherited patterns were picked up in childhood and continue running quietly in the background until you become aware of them.

Can you change your money mindset as an adult?

Yes. A money mindset is not fixed. It was formed by your environment and experiences, not permanent features of who you are. Changing it starts with awareness — identifying what you believe about money — then separating what is true from what is a story, and finally replacing the information gap with real financial literacy.

This article contains general financial information only and is not personal financial advice. Your financial situation is unique. Before making any financial decisions, please consider whether this information is appropriate for your circumstances and seek advice from a qualified financial professional if needed.

If you are ready to work on both your money mindset and your money system at the same time, My Money Makeover is a 7-module online program that takes you from awareness to a calm, practical financial life.