• Home
  • About
  • Services
  • Contact
  • Blog

4 Corners CFO

Know Your Numbers, Grow Your Business

June 7, 2022

Is it Money Mindset or Financial Trauma? 

All business owners have stories they tell themselves about money. Some of these stories are super healthy and helpful to the business’s success, and others hinder success and growth in the business. I have met many women business owners struggling to move their business to the next level and can’t figure out the problem. A lot of the time, there is either a money mindset issue or past financial trauma. Today we want to outline what each thing is and how you can remedy either in your business. 

Money Mindset

Your money mindset is the set of beliefs that you have developed throughout your life about money, wealth, and success. Many women business owners have a ton of money mindset issues that affect their business success and that they might not even be aware of! Your money mindset is developed through your experiences with money and success. Growing up in a home where money was always tight, and stress was high when dealing with finances would lead to money mindset issues centered around scarcity. 

How your parents, caregivers, and loved ones spoke and acted about money contributes to the beliefs you carry as an adult. While it can be hard to change your money mindset, it is worth the work. I know this sounds “woo-woo” but a healthy perspective helps attract money and success, while other mindsets can repel them. Two of the most common types of money mindset are: 

money mindset

Scarcity Mindset: A belief that money is limited and will run out, or there will never be enough. A scarcity mindset can also apply to clients in your business or how you view other companies in your niche. For example, there are not enough clients to go around. So, if a competitor books a client, that means you are failing.

Abundance Mindset: A belief that there is unlimited wealth and opportunities. You believe that there is enough for everyone, and you can and will bring enough money into your business to reach your personal and professional goals. 

Signs of Negative Money Mindset

  • Fear or anxiety around money
  • Feeling that you have a lack of control around your finances
  • Negative thoughts about money
  • Negative thoughts about how you deal with money
  • Procrastinating or ignoring money issues

Signs of Positive Money Mindset

  • You recognize that money is abundant, and what you need can be achieved. 
  • You have an optimistic attitude when facing uncertainty
  • You are in control of your behaviors and the decisions you make. 
  • You have a solutions-oriented attitude
  • You are willing to tackle money problems head-on

How to Change Your Money Mindset

First, take an honest assessment of your current money mindset. Think about the examples you had growing up and decide what you want to replicate and what you want to change. Understand that everyone has stories they tell themselves about money and success. 

Next, find and consume content that will influence a positive money mindset; this could be books, podcasts, or speakers that focus on living abundantly. I recently finished “We Should All Be Millionaires” by Rachel Rodgers and highly recommend it. 

Last but not least, remind yourself that you are in control of your mindset. No matter the circumstances of your past, you can choose to make changes. I have watched plenty of women entrepreneurs move from scarcity thinking to an abundance mentality. You can too!

Financial Trauma

Financial trauma can be confused with money mindset issues, but it is more severe and takes more work to remedy. Financial trauma is caused when expenses outweigh income for an extended period. While not being able to pay bills is undoubtedly stressful, the events that happen after you cannot pay cause the trauma. When you get behind on bills, it quickly snowballs. One month turns into three, and then the basic necessities of life are threatened. You may have to borrow from friends and family, leading to shame. 

I have listed some signs of financial trauma below. Keep in mind, you may experience some of these at a lower level without actually having a traumatic experience. Those with financial trauma often experience a heightened existence of more than one of these activities. 

Overspending

Overspending or compulsive spending is a typical response to financial trauma. Even though overspending contributes to the stress of lack of money, it is often used as a coping mechanism to handle stress. Overspending might come from the thought that you should treat yourself or that if you buy a specific tool or program that will help your business. 

Underspending

Underspending can be another sign of financial trauma. Even when money is available, an aversion to spending when you need to is a trauma response. Some people may think of themselves as frugal, but it is a fear response of not having enough money in the future. This can be correlated to mindsets of fear and scarcity around money. It could also stem from someone having experiences in life where money was tight, causing them to move forward in fear and trepidation.

Lack of Boundaries

Another example of financial trauma is having a lack of boundaries or discomfort with setting boundaries around finances. This could manifest in undercharging your clients and not setting clear payment terms on your contracts. 

Financial Avoidance

Financial avoidance could be avoiding opening your bills or not allowing your bookkeeper to keep you up to date on the business finances. If your feelings around money are paired with fear, scarcity, or insecurity, it is a natural response to avoid the situation entirely. The problem with avoidance is that it can have long-term consequences, such as a lower credit score or more financial debt. 

How to Recover from Financial Trauma

  • Reduce debt: If you are looking at a mountain of debt, it can feel insurmountable, which feeds into the traumatic response you have around money. Work to reduce debt to the point that it feels manageable. 
  • Have a plan for the future: A traumatic response is usually a survival response. If you live paycheck to paycheck, you might have trouble envisioning the future. Put a little money away every month into a business emergency fund. Having a plan is reassuring that you will make it through tough times and that you are creating a safety net. 
  • Pay attention to your feelings: If you feel tense or anxious about your finances, recognize the feelings and where they originate. Try to reframe those feelings into a healthier reaction. Journaling is an excellent tool for getting thoughts out of your head and reframed. 
  • Stop avoiding: Get very familiar with all of your financial obligations instead of avoiding your balances and accounts. Fear flourishes when you are speculating, so make a habit of knowing your balances. 
  • Get professional help: Financial trauma may need the help of a mental health professional. There is no shame in getting help to work through all types of trauma. 

Do you recognize yourself as having money mindset issues or past financial trauma? If so, you are completely normal and don’t need to worry! You can work through these things and rewire your brain for a healthier relationship with money. 

If you would like to chat more about how money mindset or financial trauma might be working against your business success, set up a complimentary call today. We would love to talk about your business goals and how a mindset change can help you clear those roadblocks and take your business to the next level. 

Filed Under: Budgeting & Forecasting, Business Finance, Money Mindset, Small Business, Uncategorized Tagged With: Budget and Forecast, cash flow, financial trauma, money mindset

Previous
Next

Learn

More

Want to know how a virtual CFO can help YOUR business?

Contact Us

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recent Posts

  • Perfection is the Enemy of Financial Success
  • 6 Keys to Building a Financial Plan
  • Celebrating Success in 2022 & Preparing for 2023
  • How a Business Budget Leads to Success
  • How Past Financial Experiences Affect You Today

Recent Comments

  • Danielle on How Bank Reconciliation Gets You More Time and Money
  • Danielle on How Bank Reconciliation Gets You More Time and Money
  • Danielle on Why Women Business Owners Need to Know Their Numbers
  • Myrtice Clozza on How Bank Reconciliation Gets You More Time and Money
  • my site on How Bank Reconciliation Gets You More Time and Money

Archives

  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021

Categories

  • Accounting
  • Bookkeeping
  • Budgeting & Forecasting
  • Business Finance
  • Cash Flow
  • Fractional CFO
  • Hiring
  • Money Mindset
  • Small Business
  • Taxes
  • Uncategorized

Meta

  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org
  • Email
  • Facebook
  • Instagram
  • Pinterest
  • Twitter

Be the First to Know

Get new information, tips, and updates in your inbox!

financial success

Perfection is the Enemy of Financial Success

build a financial plan

6 Keys to Building a Financial Plan

Celebrating Success in 2022 & Preparing for 2023

How a Business Budget Leads to Success

How Past Financial Experiences Affect You Today

year-end business review

How to Conduct a Year-End Business Review

Important Numbers on Your Financial Statements

How to Be Confident in Your Expertise

business finances

Tasks to Keep Your Business Finances Healthy

journaling for money mindset

Journaling for Money Mindset

Eight Places Your Business is Wasting Money

100 Money Mindset Affirmations

time to hire

When is it Time to Hire?

Is it Money Mindset or Financial Trauma? 

Dealing with Pandemic Debt

expertise

How to Use Debt As a Tool in Your Business

figuring out business spending

Different Types of Business Spending

optimize profit

Four Ways to Optimize Profit

fractional CFO

How to DIY the Fractional CFO Role in Your Business

financial roles tax prep

Financial Roles: Bookkeeper, CPA, and CFO

Best Finance Tools for Small Businesses

Why Women Business Owners Need to Know Their Numbers

How a Virtual CFO Gets You More Time and Money

How KPIs and Scorecards Get You More Time and Money

How Variance Analysis Gets You More Time and Money

How Budgets and Forecasts Get You More Time and Money

How Cost Price Analysis Gets You More Time and Money

How Revenue and Expense Drivers Get You More Time and Money

How an Expense Audit Gets You More Time and Money

How Cash Flow Management Gets You More Time and Money

How Bank Reconciliation Gets You More Time and Money

How Your Monthly Accounting Process Gets You More Time and Money

How the Right Accounting Method Gets You More Time and Money

Translating Accounting Terms into Plain English

Is the Pandemic Redefining Work/Life Balance?

Time is Money

Price to be Profitable

Piece Your Tax Info Together

Instantly Know Where Your Money Stands

Are you an overthinker?

  • Home
  • About
  • Services
  • Contact
  • Blog

Know Your Numbers, Grow Your Business

Don't just guess where your business is going this year, TELL it where to go and make a plan that can h!

Schedule Your FREE Consult Now

  • Email
  • Facebook
  • Instagram
  • LinkedIn

Prioritize Your Profit

Get a monthly reminder to pay and prioritize yourself in your business along with new tips and updates right in your inbox!

This error message is only visible to WordPress admins

Error: No feed found.

Please go to the Instagram Feed settings page to create a feed.

Copyright © 2023 · 4 Corners CFO · Hello You Designs