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Answer truthfully: Were you willing to pay the mental and emotional cost of entrepreneurship with money when you made the decision to do it? The thing is, many of us embark on this journey of vision and passion without being prepared to face or even acknowledge the mental and emotional barriers associated with money and financial independence.
What are your subconscious money habits?
They say that about 95% of our thoughts, feelings, and memories live in our subconscious, and money is no different. You have those habits that you just are aware of, like posting on social media, planning your next show, or looking at your monthly financials for some — all of this stuff chances are you’ll do. But are you able to remember the last time you had to think about swiping your bank card to buy a subscription, or was it something you probably did mechanically, like driving?
Before you embarked on this journey, you already had established ideas, behaviors, and habits around money that were formed long before you ever interacted with it directly. You learn about money by observing and absorbing your surroundings, including family, friends, and your social circle. The problem? Most of those habits are learned from the perspective of a buyer (how to benefit from sales, how to hold on to money so you possibly can have it longer, that type of thing), but not from the perspective of a business owner.
Subconscious money habits are deeply ingrained behaviors and thought patterns related to financial decisions that operate below our conscious awareness. If you haven’t yet managed to grow your small business and don’t see a clear path to financial independence, this could possibly be the reason why.
How do subconscious habits influence financial development?
Most of the students and private clients I support come to me because they either need to see more cash, or they know they are getting money but have nothing to show for it financially. In other words, despite getting more cash, they are in the same financial situation they were in before. So the query is: why?
Just last week I worked with a private client who discovered a significant subconscious money habit that she had developed when she was 15. Her father gave her what she remembers as her first significant sum of money. Having never received financial education at home or anywhere else, she spent funds nevertheless she wanted without considering the consequences. As a result, she developed a huge aversion to risk and spending money. This led to her not spending money on herself and created a fear of misusing any funds. So her money habits were one of avoidance.
Fast forward to her business and the same habits continued to show up. She avoided investments that would grow her business by underpricing her services because she had no value structure and was afraid of rejection. It was painful to watch her business take its toll despite all her labor.
Everyday Subconscious Money Habits You Should Track As An Entrepreneur
Everyone in our programs wants to know how to higher change these subconscious habits. But before you possibly can change anything, you have to develop into aware of them. I have to say that while I have identified several every day subconscious money habits throughout my profession that are necessary to track, it is all the time value mentioning that each person will encounter their very own unique subconscious habits beyond the ones listed below, like anything in finance, so please do your personal research and discover any that you just see as potential roadblocks to your growth as an entrepreneur.
1. Undervaluing or overvaluing services and products
Tell me about your pricing and the logic behind it, and I’ll let you know about most of your subconscious habits. Your pricing is one of the most neglected assets as an entrepreneur. Yes, you read that accurately; I called it an asset because of how much it builds your small business and your positive money flow. Your pricing strategy reflects your personal financial history, possible financial traumas, and some toxic habits that chances are you’ll not pay attention to that directly impact your small business.
Underpricing may have its roots in a lack of business structure, a misunderstanding of your organization’s vision, or a fear of rejection. On the other hand, overpricing can alienate potential customers and share some of the same basic characteristics as underpricing.
How to fix it? Learn the art of pricing. Combine pricing strategies, market research, and understanding your value proposition. Consider consulting with pricing experts or financial advisors to ensure your prices reflect the true value of your services or products.
2. Investing without a plan
It seems that the culture of “invest in your business because later you’ll make it work” has gone much deeper than it should. Most of my private clients struggle with this subconscious financial habit: they invest in equipment, self-development, platforms and things to theoretically grow their business – all logical purchases. However, many fall into the habit of investing without a clear plan. What is the path and how directly, on paper and in milestones, will it work for you and your small business? We can say that in most cases we see the source of this behavior as a subconscious belief that spending equals growth without considering strategic planning.
How to fix it? Before making any financial investments, develop a detailed investment plan. Assess the potential return on investment (ROI), the necessity of the purchase, and the way it aligns with your organization goals.
3. Avoiding Understanding Financial Issues
The “I’m not good with money; I never have been and never will be” mindset is more detrimental to your small business growth than you may imagine. Avoidance includes delaying or neglecting financial planning, accounting, and financial reviews. It also includes avoiding talking to a financial skilled like me who can put you on the path to financial growth, and doubling down on social media when it won’t make a difference.
The real effect of avoidance is that it hides serious financial traumas that must be made clear so you could make higher and faster financial decisions that will not allow you to miss opportunities.
How to fix it? Take the time to educate yourself financially. Attend workshops, read books, and follow financial experts to improve your understanding of business finance.