Having the right money mindset is important for promoting successful investing and financial management. While it’s easy to get caught up in the technical details of saving and investing, understanding, and overcoming psychological barriers can have a huge impact on your financial success.

Understanding money media and gender bias

Society often pushes certain stereotypes about gender and financial management. A 2018 study found that articles concerning money aimed at women tended to focus on saving, whereas those for men tended to encourage taking financial risks.1 However, in a 2023 article, Deloitte posited that men are statistically as likely to splurge as women, and to spend more in each instance.2

Fear and loss aversion

Fear is a common hurdle when it comes to investing. The media and societal expectations may influence many of us towards having subtle fears about money management. Loss aversion theory explains that the pain of losing money feels much worse than the joy of gaining it. This fear can hold you back from investing or lead to rash decisions when the market dips.

Practical steps to improve your money mindset

  1. Set clear goals:
    Decide what you’re investing for, whether it’s a home, retirement, or education. Having specific goals can help keep you focused and motivated.
  2. Forgive past mistakes:
    Acknowledge any financial mistakes you’ve made and learn from them. Dwelling on the past can stop you from moving forward.
  3. Build financial confidence:
    Educate yourself about investing and money management. The more you practise, the more comfortable and confident you’ll become.
  4. Embrace a long-term perspective:
    Remember that investing is a marathon, not a sprint. Long-term investments usually handle market fluctuations better than short-term ones.

By adopting a positive money mindset, you can overcome fears, build confidence, and make informed financial decisions that can lead to long-term success. 

 


To learn more about investing, go to Investing hub in the CommBank app.

This content is brought to you by Friends that Invest.