Mindset Matters

    When it comes to money and debt, especially the decisions individuals make when taking out a  loan from a money lender are not solely affected by financial needs. There are a lot of factors at play, since money habits are tied to one’s personal behavior, upbringing, culture, and values. 

    By being aware of this interrelationship, one can come up with valuable insights on how to address present and future financial challenges. By being honest with oneself, it is possible to reshape borrowing behaviors and ultimately get to financial wellness.

    Here are  five ways your mindset can affect your borrowing habits:

    1. Risk Perception

    Your mindset influences how you perceive financial risks associated with borrowing, affecting your willingness to take on debt responsibly or avoid it altogether. This however, does not mean applying for loans blindly. 

    Part of cultivating a healthy risk perception is knowing how to manage uncertainty and taking into consideration default behavior on your part. Research a loan product thoroughly and compare interest rates from different lenders. Once you get to understand the product features and how the payments can fit into your current lifestyle and behavior, your anxiety will be lessened. Having a plan of action is usually a good solution to fear.

    1. Delayed Gratification

    Your mindset towards instant gratification versus long-term goals impacts your borrowing decisions. It determines whether you prioritize immediate purchases over saving and investing for the future. 

    Life is stressful and full of challenges. The thing is, one will continue to face challenges during one’s lifetime. Mastering your tendencies when faced with stress, pressure and uncertainties will help you endure the commitment of a long-term loan and the years you will have to forego luxuries just to comply with payment obligations. Otherwise, you might squander the loan proceeds on trips and unnecessary items.

    1. Attitude Towards Debt 

    Your mindset shapes your attitude in life and your actions. Things become either good or bad depending on how you regard them. If you see debt as a tool, you are likely to be a person who values financial literacy and keeps up with financial trends. You are likely to explore investment options and come up with strategies for financial wellness. 

    The opposite is also true. If you see debt as a bad thing, it may be coming from some events in the past. Unfortunately, it is easy to get stuck with this mentality especially if you grew up in a household where acquiring debts is equated to irresponsibility or lack. The good thing is, with deliberate effort, you can still turn this around. It’s all up to you.

    1. Financial Literacy

    Truth be told, financial topics are boring. After all, who wants to look at rows and rows of numbers? It would be easier to just spend it all than to make a simple projection of your cash flow. Unfortunately, nobody becomes wealthy and financially savvy by simply living within one’s means. 

    That means you should actively seek knowledge on how to make informed financial decisions. Read online articles on how you can use loans as a tool to achieve financial security. Talk to people who have the same goals. Do not be afraid to appear ignorant. All learning starts with ignorance. 

    1. Goal Setting

    Your mindset towards setting and achieving financial goals guides your borrowing habits. It impacts whether you borrow strategically to invest in assets or impulsively for short-term consumption. Your goals can shape your behavior. If you dream of financial security, it would be easier to say no to unnecessary expenses.

    Are you thinking of borrowing to finance a leisure activity or are you planning to borrow money to set up a small business? The first would provide you with immediate but fleeting joy. The second would probably give you more problems than you are prepared to handle but in the long run, it will be a source of income and learning. 


    When you think about money, what do you feel? Do you immediately think about things you want to buy? Wht about debt? Do you feel afraid and anxious? These feelings can serve as guideposts in identifying your mindsets on money and debts. At the end of the day, money is both an important resource and a means to an end, and debt is one way to acquire it. How you deal with debt is then up to you.