When it comes to personal finance, the hardest step isn’t opening a bank account or building a budget. It’s realizing that change is necessary in the first place. Many people find themselves stuck in a state of “unawareness” in behavioral psychology terms. They are stuck in the precontemplation stage of the Stages of Change Model, meaning they’re not even considering financial improvement yet.
If you’ve ever thought, “I’m just not good with money” or “my finances are fine the way they are,” you might be in this stage without even realizing it. The good news? You don’t have to take drastic action overnight. Instead, by using thought exercises and journaling, you can gently shift your mindset and start moving toward financial empowerment—without the stress.
Understanding The Precontemplation Stage In Personal Finance
The precontemplation stage is when people aren’t actively thinking about change. They may be unaware that their financial habits need adjusting, overwhelmed at the idea of taking action, or feel incapable of change. Common signs include:
- Ignoring credit card statements or bank balances
- Feeling indifferent about savings or debt
- Believing financial security is out of reach
- Assuming financial planning is only for the wealthy
This stage is normal and doesn’t mean you’re incapable of change. It just means you haven’t yet connected with the why behind improving your financial life. Here are some strategies that can help you get started.
Develop Awareness And Shift Limiting Beliefs Through Reflection
Step 1: Shift Your Mindset With Thought Exercises
Thought exercises help break down mental barriers and reframe how you view money. Here are a few powerful ones to try:
1. Identify Your Financial Story
Your relationship with money is shaped by past experiences, cultural beliefs, and family influence. Try this to help you identify your story:
- Ask yourself: What messages did I grow up hearing about money? Were they empowering (“Money is a tool for freedom”) or limiting (“Money is the root of all evil”)?
- Write it down: How have these messages influenced your financial decisions as an adult? Are they helping or hindering you?
- Reframe: Choose one negative belief and rewrite it into a positive one. For example, if you grew up thinking “I’ll never be rich,” change it to “I have the ability to build financial security over time.”
2. Visualize Your Financial Future
Visualization is a powerful motivator that can help you connect emotionally with your goals.
- Close your eyes and imagine your ideal financial future. Maybe your debt-free, traveling without constraints, or simply not stressed about money.
- Be specific: What does your day look like in this financially secure future? How do you feel? Who are you surrounded by? What habits have helped you get there?
- Ask yourself: If you continue with your current financial habits, will you reach this future? If not, what small shifts could start moving you in the right direction?
3. Challenge Your Assumptions
Many people believe their financial situation is unchangeable. Break this mindset by questioning your assumptions:
- What do I believe about money that might not be true? (“I need to make six figures to save money.”)
- What’s one small financial change I can make that disproves this belief? (“Saving $5 a week proves you don’t need a huge income to start saving.”)
By regularly challenging limiting beliefs, you open the door to new financial possibilities.
Step 2: Develop Self-Awareness Through Journaling
Journaling helps uncover patterns, clarify thoughts, and build momentum. Here are a few prompts to guide your financial reflection:
1. The ‘Where Am I Now?’ Prompt
Write about:
- Your current financial situation (income, savings, assets, debt, spending habits)
- How you feel about your financial state — stressed? Content? Indifferent?
- One small thing you’re grateful for regarding your finances (“I have a steady paycheck.”)
This exercise fosters financial awareness without judgment, making it easier to see areas for improvement.
2. The ‘Money Wins’ Prompt
Many people focus only on financial mistakes, but celebrating small wins builds confidence. Each week, write down:
- A small money win (“I cooked at home instead of ordering takeout.”)
- A positive financial habit you practiced (“I checked my bank account instead of avoiding it.”)
Recognizing and highlighting progress keeps motivation high and reduces financial anxiety.
3. The ‘Future Self’ Letter Prompt
Write a letter to your future self (for example, the future you in one year or five years) describing:
- The financial habits you’ve developed
- The obstacles you’ve overcome
- How your financial situation has improved
Revisit this letter periodically (every 3 months) to evaluate your progress. Tracking your growth will keep you inspired to continue.
Step 3: Take Small, Low-Stress Actions
Once you’ve started shifting your mindset, small, tangible actions help build momentum. Here are a few effortless ways to ease into financial improvement:
- Check your bank balance once a week – Awareness is the first step to improvement.
- Download a budgeting app – Even if you don’t use it yet, having it available makes future steps easier.
- Listen to a personal finance podcast – Passive learning can shift your mindset without pressure. Try Planet Money or Money for Couples.
- Automate a $5 or more weekly savings transfer – It’s not about the amount. It’s about building the habit that will lead to a strong financial foundation.
By taking small, non-intimidating steps, financial change becomes manageable and empowering rather than overwhelming.
Resources For Further Growth
- Books: “The Psychology of Money” by Morgan Housel, “I Will Teach You To Be Rich” by Ramit Sethi
- Podcasts: “Money for the Rest of Us” by J. David Stein, “Optimal Finance Daily” by Diania Merriam
- Websites: NerdWallet, Investopedia, Khan Academy
- Apps: YNAB (You Need A Budget), Simplifi (financial dashboard/budgeting), PocketGuard (tracking spending), Monarch Money (money management for singles and couples)
Final Thoughts: You Are Capable Of Financial Change
If you’ve been feeling stuck in financial inertia, know this: change is possible, and you don’t have to do it all at once. By using thought exercises to shift your mindset and journaling to build awareness, you’ll naturally start moving toward financial well-being. Each reflection, realization, and small action gets you closer to a future where money is a source of security, not stress.
Remember, it’s not about perfection. It’s about progress, so what are you waiting for? Grab a journal, start exploring your financial beliefs, and take one small step today. Your future self will thank you.
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