How to improve your relationship with money


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Achieving your financial goals in life isn’t just about how much you earn; it’s also about your money mindset. Some of our most deeply held beliefs are about money. Do you talk about money and seek to enhance your knowledge? Do you think of yourself as a spender or a saver? What does financial success look like to you? The answers to these questions all reflect our money mindset. Changing these ideas can be challenging but worth it.


To create a solid financial future, it’s essential to have a strong, positive money mindset. So, if your financial habits need a little (or a lot of) work, here’s how to change your money mindset.


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What Is a Money Mindset?

Your money mindset is your approach to handling money. It determines your spending and saving habits as well as your motivations for your financial management.

Whether you are aware of it or not, everyone has a money mindset — a collection of beliefs starting from childhood that shape what you do with your money. (Your money mindset could even be, “I never think or talk about money.”)

Your money mindset can lead to both positive and negative financial decisions.


For example, have you automated your savings, transferring cash out of your paycheck first and budgeting with the remainder? Or do you think saving isn’t something you need to or can focus on just yet? Do you use a budget? Can you treat yourself occasionally, or is buying a $5 coffee not a part of your financial plan? Your money mindset characterizes your relationship with money, and so it is essential to understand and possibly tweak it.

What Is a Negative Money Mindset?

A negative money mindset is a set of unhelpful financial beliefs that can lead to poor resource management. It often involves a constant feeling of stress or guilt regarding money or simply disorganization. It may also involve the belief that “if I just made more money, things would change or all my problems would be solved.” While a higher salary or inheritance might help you toward your financial goals, having more money won’t change your financial mindset.


While it may seem counterintuitive, your income level doesn’t automatically determine your sense of financial freedom. Additionally, it’s worth noting that your money mindset exists whether you’re conscious of how it influences your behavior or not.


Here are some examples of the ways in which a negative money mindset might have a bad influence on your life:

  • You might spend too much money due to comparison with others. You see a friend or colleague renting a pricey apartment and think you should too. That can be an aspect of lifestyle creep, in which your spending increases as your income grows, preventing you from saving and acquiring assets.
  • You might not save for long-term goals, like a house or retirement, because your parents never wanted to talk about money when you were growing up.
  • Because money stresses you out, you might fail to set financial goals, like paying off your student loans on time.

If it feels like you’re in this negative zone when it comes to your finances, know that you are not saddled with it for life. We’ll explore how to develop a money mindset that’s more positive and productive later in this article.

How Your Beliefs on Money Affect Your Finances

Your primary, most powerful beliefs about money most likely come from your parents and your childhood. Every child absorbs financial beliefs from the most influential people in their life. Then, as you grow older and begin handling money, they live out those financial beliefs, for better or worse.


For example, if your parents modeled money as a way to pamper yourself, you may find that you impulse-shop when life becomes challenging. Your money mindset is that spending equals financial self-care.


On the other hand, you may have a reputation among your friends as “cheap” because you grew up in a penny-pinching household that considered luxuries a waste of money. In both cases, your money mindset puts your financial habits into motion.


These examples underscore that children tend to mimic the behaviors of their parents and adopt their money habits in their own adult life.

Why Reshaping Your Money Mindset Is Important

It’s crucial to address negative money mindsets. Otherwise, you’ll likely continue to act on the same faulty beliefs. For example, you might realize that your parents’ approach to money made a lasting impact because you always feel uneasy when treating yourself. Conversely, you might struggle to control your spending because none of your family or friends ever follows a budget.


Recognizing an unproductive facet of your money mindset gives you the power to change it. By asking yourself questions about how you currently treat your money and how you’d like to change, you can reorient yourself and create a long-term financial plan. In fact, reshaping your money mindset may include setting financial goals for the first time in your life.

By changing your money mindset you can take full control of your finances, break bad spending habits, and reach your financial goals.

How to Change Your Money Mindset

So, you might wonder, exactly how can you change your mindset about money? While your upbringing and core experiences impact you in significant ways, you have the ability to recast your money mindset or create an all-new one. When reshaping your money mindset, the following tips can help you transform unhelpful financial behaviors into life-changing, literally enriching habits.

Success With Money Is a Possibility

One key to changing your money mindset is to increase your confidence in your abilities. Don’t count yourself out because of your background or financial circumstances — it’s possible to change these patterns.


Whether you’re working up the courage to sit down and make a beginner’s budget, tackle lingering debts, or give yourself permission to make a fun but totally unnecessary purchase, believing it’s possible is crucial for your success. Perhaps saying affirmations will help you, or maybe reading about others who have attained what you are dreaming of will work best. The right technique is a personal decision.

Understanding Why You Feel This Way

Money is emotional for everyone. Feeling anxious, worried, or excited about your money is normal. Our emotions are rooted in beliefs; therefore, you might feel elated or stressed on payday depending on the beliefs you’re associating with your money. You might crave the feeling of going shopping or you might wake up in the middle of the night worried about your car payments.


Delving into how much money you have coming in and going out may help you better manage your funds. If you have a financial plan that allows you to sock money away and also treat yourself a few times a month, getting paid might create feelings of satisfaction or confidence. Hence, your money mindset is creating positive emotions for you. However, if your paycheck reminds you of your mounting bills, it’s probably time to identify where these feelings are coming from. This way, you can start shifting your money mindset to elevate the stress and anxiety.


Additionally, the more you avoid money, the more intimidating it can feel. Even people with plenty of income might run from figuring out their living expenses because it sparks negative emotions.

Avoid Comparing Yourself to Peers or Social Media Standards

Parent’s aren’t the only ones who influence your money mindset. Peers and mainstream culture send messages about what success looks like or how to best manage your money.


Seeing what others do or think as irrelevant to your money mindset. What works for someone else may or may not work for you, especially if you have different goals. Plenty of general financial principles are worth adhering to, but even those aren’t set in stone. For example, there are many different types of budgeting methods, including the 50/30/20 budget rule. Therefore, it’s wise to understand your own financial situation and find solutions that work for you to improve your money mindset. Even if your twin sibling swears by a certain tactic, it may not be right for you, and that’s okay.

Overcoming Your Financial Fears

Change can be scary, and so can money, so cut yourself some slack if you’re afraid of changing your money mindset. It can be comfortable to settle back into the familiar, even when it’s not working.


However, overcoming financial anxiety and developing a positive money mindset is possible. Forge ahead at your own pace, and explore your money mindset. What are the things that worry you about money? Where are your biggest fears coming from?


As you unpack that, remind yourself of your motivation to change. Keep your goals at the forefront, and encourage yourself to take a step in that direction. Taking a small but concrete action toward your goals is how to develop resilience, a key characteristic for succeeding in life.


Recommended: Should You Pay Off Student Loans or Invest?

Avoid Dwelling on the Past

As you attempt to change your money mindset, there may be errors from the past sticking in your mind, reinforcing the idea that you are bad at financial management. Dwelling on the past can stop you from creating a different future. The failures, mistakes, and traumas from the past are real — but they don’t have to define you. For example, if you’ve endured a romantic breakup, that doesn’t mean you can’t date again and find love. In the same way, just because you had too much credit debt recently doesn’t mean you can’t get that issue wrangled.


It’s a good idea to jettison this kind of looking-back viewpoint. Instead, try putting your effort toward what you can change in the present and strive to achieve in the future.

The Takeaway

Your money mindset is the attitude and beliefs that form your relationship with your personal finances and it drives your financial habits. Since most people pick up unhealthy financial habits along with healthy ones, it’s crucial to recognize the financial beliefs that aren’t serving you. Then you can set about changing your money mindset and shifting your behavior to better achieve your goals.


How do I get rid of a money scarcity mindset?

The belief that you never have and never will have enough money is part of your money mindset. To change that belief, identify where the mindset came from and make a positive change, such as setting a small savings goal and achieving it.

What is a poor money mindset?

A poor money mindset consists of unproductive beliefs about money that lead to negative financial decisions and habits. An unhealthy relationship with money when growing up or having made past financial mistakes can create a poor money mindset.

How is a money mindset formed?

You form your money mindset through the financial beliefs you hold as true. Your childhood, peers, and financial successes and failures help define your money mindset.


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Here’s what happens to your debt when you die


Do you know what will happen to your debt when you die? Some debts are forgiven while others may be passed down to heirs. Read on for the answers to some of the most frequently asked questions related to death and debt.


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In order to accurately answer this question, we need to examine the most common types of debt people accumulate. In other words: Not all debt is equal. The type of debt you have and when you accumulated the debt will determine how and if your debt is passed on to others when you die.

The Most Common Types Of Debt


If you die with credit card debt, there are two things that may happen:

  1. Your debt may be forgiven and written off by the credit card company
  2. The debt will be passed on and the responsibility of a survivor


If you are the sole owner of the debt when you die, (not married or a cosigner) the credit card companies will be involved in the probate process. The money left in your estate, any retirement accounts, or other items worth money will be sold and the outstanding debts will be paid.

If there is not enough money in your estate to pay off the remaining credit card balance, your children or beneficiaries will not be required to pay the remaining balance. The outstanding debt will be “forgiven” by the credit card company.


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If the credit card is a joint account with a living spouse or a cosigner, the other account holder will be responsible for the debt. If you have authorized users on the account but they are not the account owner, the users will not be responsible for the debt.


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This is one of those myths that continues to live on. Credit card debt does not go away after seven years. The confusion with the seven-year time frame comes from the credit report time requirement.

After seven years, old debts begin to fall off of your credit report. Your debt, however, is still very much alive and owed. Lenders can and will continue to pursue the amount owed until it is paid, settled, or charged off. Do not be fooled into thinking your credit card debt will go away after seven years.


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The quick answer? It depends. There are several factors that determine if a deceased spouse’s credit card debt will be passed along to the surviving spouse. If the credit card debt was incurred before marriage and the deceased spouse was the sole owner of the account, in most cases, the debt will not be the responsibility of the surviving spouse.

If the credit card debt was incurred after marriage and the deceased spouse was the sole owner of the account, the state you live in determines the surviving spouse’s responsibility. If you live in one of these community property states and the debt was incurred after marriage, the surviving spouse is responsible for the credit card debt of their spouse regardless of the account ownership:

  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington
  • Wisconsin

If you do not live in one of these states, generally the surviving spouse will not be responsible for the credit card debt if they were not a joint owner of the account. If you are a joint owner on the account, you are now solely responsible for the debt.


Again, where you live determines what can happen to your medical bills when you die. Generally speaking, children and heirs will not be required to pay back the outstanding medical bills of their parents. With that being said, there are a couple of instances where a child could be responsible for the medical debt of their parents.


When a child cosigns admission paperwork acknowledging financial responsibility if the adult is unable to pay their bills, this debt may be passed down to the child.


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There are 26 states that have filial responsibility laws that state a child may be responsible for a deceased parent’s medical debt in certain situations. The states that have filial responsibility laws are:

  • Alaska
  • Kentucky
  • New Jersey
  • Tennessee
  • Arkansas
  • Louisiana
  • North Carolina
  • Utah
  • Indiana
  • Nevada
  • California
  • Maryland
  • North Dakota
  • Vermont
  • Connecticut
  • Massachusetts
  • Ohio
  • Virginia
  • Iowa
  • New Hampshire
  • Delaware
  • Mississippi
  • Oregon
  • West Virginia
  • Georgia
  • Montana
  • Pennsylvania
  • South Dakota
  • Rhode Island

Now, before you become overly concerned about living in one of these states, understand that the enforcement of filial responsibility laws is extremely rare. If you have significant medical debt, consult with an attorney in your state to see exactly what responsibility your adult children may be required to pay back.


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Student loan debt may or may not be passed on to survivors when the borrower dies. What happens to the loan depends on what type of loan was taken out and when it was established.

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If you have federal student loans, they will be forgiven upon death. Federal student loans do not pass on to others as long as a death certificate is presented to the lender. Federal student loans that fall into this category are:

  • Direct Subsidized Loans
  • Direct Consolidation Loans
  • Direct Unsubsidized Loans
  • Federal Perkins Loans


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On Nov. 20, 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act was amended. The added section releases cosigners of a private student loan from financial responsibility if the primary borrower dies. Due to this, all new private student loans with cosigners are not required to repay the loan upon the student’s death.

However, student loans with cosigners taken out before Nov. 20, 2018, may still require the cosigner to be held responsible for the debt.




Federal Direct PLUS Loans are also forgiven upon the student’s death. In the past, the parent who signed for the PLUS loan was required to bear the burden of the tax responsibility and file the forgiveness as “income” after a child’s death.

Currently, The Tax Cuts and Jobs Act of 2017, is in effect and releases parents from this tax responsibility. This tax stipulation remains in effect until the year 2025.


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There is several different scenarios involving vehicle loan debt upon the borrower’s death. If the auto loan has a cosigner or the vehicle was purchased in a community property state after a couple was married, the cosigner or spouse is responsible to repay the auto loan.

If the loan was obtained before marriage and is only in the deceased spouse’s name, generally the surviving spouse is not held responsible for the debt. The bank will take possession of the vehicle to settle the outstanding debt or the surviving spouse can pay off the vehicle loan.

If the borrower is not married, the survivors can either pay off the vehicle loan and keep the vehicle, sell the vehicle and pay off the loan or return the vehicle to the bank. Heirs do not inherit vehicle loan debt.


Payday loan debt is very similar to credit card debt when you die. If there was not a cosigner or someone else listed as jointly responsible for the loan, then the company writes off the debt as a loss. Payday loan debt is not transferred to heirs but may be the responsibility of a surviving spouse if the debt was incurred after marriage in a community property state.


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In probate, the home must be paid off with the funds from the estate or the mortgage company must agree to let someone else inherit the loan. If you still owe money on your home, your spouse or heirs usually have three separate options:

Option 1: Sell the home to pay off the outstanding mortgage. The executor of the will can initiate a home sale to fulfill the outstanding debt obligations. If the home is not worth what is owed, additional money from the estate will be used to pay off the mortgage. If additional money is still required, the bank can take possession of the property.

Option 2: If there is enough money in your estate, your heirs can use that money to pay off the mortgage. Or the beneficiaries can use their own money to pay off the loan in full.

Option 3: If there is not enough money in the estate to pay off the loan, an heir may elect to contact the lender in an attempt to take over the loan. The loan would need to be transferred into the new borrower’s name which would require the heir to meet the credit obligations for a loan.


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Lenders can force the sale of a property to fulfill the outstanding equity loan balance if the estate does not have enough capital to pay it off. This is another scenario where the heir may be able to apply with the lender to take over the payments.





If you have federal tax debt when you die, the IRS gets the first chance at your estate. Legally, the executor of the state is unable to pay any other debt or obligation until the federal tax debt is settled.

If a substantial amount is owed, the IRS will quickly put a lien on any property owned by the deceased in an attempt to satisfy the debt. The federal government will get their money one way or another – but the heirs will not personally be liable for the outstanding tax debt.


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There is not an automatic notification process when a person dies. The next of kin or executor of the state is required to contact the bank and provide a copy of the descendant’s death certificate.

When the death certificate is presented, the financial institution will freeze all of the associated accounts until the probate process is completed. If money is not owed to other lenders, the beneficiaries will be given access to any monies left in the deceased person’s accounts.


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Even though most debts will not be passed on to your heirs when you die, you may not want them to deal with the hassle of paying off all your debt with your estate – only to be left with nothing.

If you have struggled with debt your entire life, a cheap term life insurance policy may be an option to leave a small inheritance to your heirs. Most life insurance policies are dispersed tax-free and are not accessible to creditors.




Leaving debt behind is a fear many seniors face. On the bright side, your heirs will usually not be personally responsible for paying off your outstanding debts. However, the sooner you can clean up your own financial mess, the better.

Do your best to start paying off your debt so your executor is not faced with a long probate process. If you need help getting started, check out this related post The Debt Payoff Playbook.

This article originally appeared on Arrest Your Debt and was syndicated by


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