Why You Need To Develop A Money Skillset As Well As A Money Mindset?

As a Money Psychologist and a passionate reader, I’m always on the lookout for books and resources about money. There’s a lot out there; with the vast majority of them focusing on shifting your money mindset away from scarcity and towards abundance. Now I’m not saying that having a positive mindset isn’t important but in my opinion, it’s not the place to start, and if you’ve already done lots of money mindset work and you’re not earning the money you want yet, it may be that you’re lacking a money skillset.

What is your Money Skillset??

Basic money skills include behaviours such as being able to save, budget and manage debt, but I believe there are other vital skills we need, in addition to thinking positively. These include:

1. Conflict Resolution Skills
2. Setting boundaries - saying no
3. Being confident to ask for your needs to be met
4. Being comfortable talking about money
5. Being able to manage your emotions and energy
6. Being able to manage your time
7. Being able to heal any psychological wounds

As you can see these are all vital skills you need if you want to attract, receive and keep more money. Being unable to talk about money comfortably means you’ll avoid sales conversations,? being unable to manage conflict means you’ll get bullied into spending money you don’t want to and being unable to manage your time and ask for what you need, will lead to you being busy helping other people make money and not yourself.

This is the wider skill set that sets you up for success and makes you more resilient to unexpected events.?

Why is it important to develop a money skill set first?

1. Action Over Attitude

Imagine your perfect day, waking up to the waves lapping, the sun shining and knowing that you can do whatever you like today because you’ve got zillions of pounds in the bank. It’s a beautiful dream and who wouldn’t want that kind of a start to the day. That’s what makes a money mindset books so easy to sell; it takes no effort to dream and it doesn’t require you to do anything different or difficult. Just dream and it will happen, but that’s not how the real world works and whilst a mindset full of positive thoughts might be a great motivator, without a money skillset it leads to disappointment, procrastination and the big S - shame. “Why can’t I make more money?”

Many of my clients come with the intention of earning 6 figures but haven’t mastered the skills of budgeting and saving yet, let alone investing wisely, or reducing their debt. Developing a positive mindset without your money skillset is like wanting to run without having spent the time learning to walk first. If by chance you do make more money, you’ll soon find plenty of ways to spend it quickly.

2. Being Resilient To Future Shocks

Skills such as budgeting, tracking expenses, understanding cash flow, and planning for taxes are essential skills that need to be practiced and implemented consistently. Hopefully they were passed on by your parents and learnt at an early age, but for many people (myself included) their parents were lacking in money skills, so couldn’t pass them on. Without these skills you’re much less resilient to future shocks, for example redundancies, business closures and remember events like Covid. While a positive money mindset might help you stay optimistic in the face of these challenges, it's your money skill set that provides the practical tools to navigate them effectively.

These are not just one-time activities but ongoing skills that require consistent practice and adjustment, so that once established you can build the financial resources to protect you from these shocks. Whilst thinking positively might make you feel better in the short-term, your positive mindset on its own, won’t enable you to adapt and thrive to changing circumstances.

3. Being In Control

I’ve seen plenty of clients make poor financial decisions from a positive money mindset. Investing thousands of pounds on courses, being manipulated into purchasing business tools they don’t need or giving refunds because they’re too scared to say no, are just a few ways that a positive money mindset can give you the confidence to make the wrong decision (“money is always flowing to me” thinking, without knowing their numbers).

Being able to deal with conflict, have confidence to set boundaries, having more self awareness to know what’s right for you, these are all skills that empower you to ask the right questions, evaluate options critically, and make choices that align with your long-term financial goals. Your money skillset is crucial in avoiding costly mistakes and growing your financial capability.

4. Mastery Through Practice

Your money skill set is developed and honed through practice and reflection. Unlike your mindset, which is often about adopting a set of beliefs or attitudes, your money skillset requires active learning and continuous improvement, so that when your potential client says “I can’t afford your course” you don’t stare at them blankly and move on. Learning how to handle sales objections, refund requests and establish boundaries takes practice and can trigger a great deal of discomfort initially. Over time, skills become second nature, which together with a positive mindset then drives? long-term financial success.

5. Empowerment Through Knowledge

A strong money skill set empowers you to take control of your financial future. When you understand how to manage your money effectively, you're less likely to fall into common financial traps, such as high-interest debt and overspending. You become less reliant on others for financial advice, validation and confirmation that you’re doing the right things. You grow your ability to make decisions that are in your best interest.

This empowerment extends beyond your own finances. By developing and applying money skills, you also set a positive example for other family members or peers, who may look to you for guidance. The knowledge and habits you cultivate, have a ripple effect, improving not just your finances but also your relationships and health.

6. Achieving Long-Term Success

Ultimately, financial success is not just about having the right mindset; it's about taking the right actions consistently over time. While a money mindset can inspire you to think big and set ambitious goals, it's your money skillset that enables you to take focused, inspired action and achieve those goals.?

A money mindset without competent money skills is like having a map but not knowing how to read it. You might know where you want to go, but without the right money skills, you're unlikely to reach your destination. By focusing on building your money skillset, you equip yourself with the behaviours to attract, receive and keep more money so that you can wake up to those waves crashing outside your window.?

Remember, attracting, receiving and keeping money isn’t just about your mindset—it's about the behaviours and actions you take because you deserve to be seen as the expert you are and be paid well for it.

Carolyn Whitehouse is a Money Psychologist, Budget Coach and Speaker who over the last 10 years has mentored hundreds of purpose-driven business owners to build their financial capability and rewire their money mindsets. Carolyn’s unique Money Quotient? Framework brings confidence and clarity, enabling them to let go of self-doubt, charge their worth and achieve higher levels of success?

The best place to connect with me is on LinkedIn?- DM me and let's talk