How Your Money Mindset Impacts Financial Success

Joe Duran, Head of Goldman Sachs Personal Financial Management (PFM), recently spoke on The goop Podcast to share his thoughts on ways to make improved financial choices by understanding your attitude toward money.

Listen to goop’s podcast: Examining Your MoneyMind

During the interview, Joe explained how the financial challenges he faced early in life informed his attitude toward money. That was important to his success as an entrepreneur and head of household because understanding your emotional relationship with money—namely your predisposition toward how you think about spending, saving and planning—can help you make clearer, more informed choices that bring you closer to your financial goals. This behavioral mindset for financial decision-making, which PFM calls your “MoneyMind^®”, may be a helpful key to building a truly personalized financial strategy.

Types of MoneyMinds

There are three types of MoneyMinds. One is typically dominant, and it’s important to strike the right balance among all three:

1. Protection—If this is your dominant mindset, you tend to be responsible with money and are primarily driven by security. No matter how much you save, you may never feel you have enough.
2. Happiness—If this is your dominant mindset, you’re primarily driven by a desire to seek immediate gratification.
3. Commitment—If you have this MoneyMind, you focus on using money to take care of others you love and are primarily driven by a desire to help them, and might not sufficiently voice your own needs.

Take our short quiz to discover your MoneyMind.

Understanding your MoneyMind is important, but there are still many things we can’t control, such as inflation and interest rates, so don’t spend a lot of time obsessing over them. Instead, focus on what you can control like how much you save and invest on a regular basis, spending choices and major timing decisions such as buying a house. For example, over-saving could actually detract from the enjoyment and fulfillment you feel from living life today. Alternatively, if you continually put off investing to avoid risk, your portfolio may fail to generate the potential returns you’ll need to live more of the life you have in mind for tomorrow.

In short, think about your decisions in a long-term, disciplined manner rather than in a reactive, impulsive way. Realize that making financial choices entails tradeoffs. Money is fuel for funding your goals. So, it’s important to clearly understand your goals and why you work, and align these goals so that they are true to what matters most to you.

Next Steps

Connect with one of our personal financial advisors near you to discover how they could help you and any others in your household understand your MoneyMind(s) to make more balanced financial choices, and create a financial plan built around your mindset(s), priorities, values and investing preferences to help maximize your return on life, today and tomorrow.

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