Five years ago, a running buddy and I were rounding Central Park’s loop when I blurted out, in utter defeat, "I'll never pay off my debt."
I thought nothing of striding six miles, but couldn't imagine ever triumphing over my grad school loans and maxed-out credit cards. I felt overwhelmed and hopelessly tamped down by mounting expenses.
"You can, and you will," said my friend. "Stop thinking of this as a mountain to climb. Start chipping away, little by little."
That day, buoyed by her words, I bought a little notebook that changed my life. In it, I scribbled down all the scary numbers and faced the hard facts. It gave me exactly what I needed—a starting point.
Get started with a free financial assessment.
Get started with a free financial assessment.
When I received a letter in the mail two years later, confirming that I’d paid off a $26,000 loan, pride washed over me. What’s more, I had deleted all $12,000 of plastics debt and even plunked $10,000 into a mutual fund. What had kept me from doing it earlier? It wasn't the debt itself—it was my misguided thoughts about money.
I slowly replaced my paralyzing refrains with productive thoughts, and so can you. To figure out the best way to rescript your brain for positive, actionable thinking, we asked St. John, along with two other experts, to highlight seven toxic money thoughts you should replace today.
1. 'I'll never be rich.'
Why It's Destructive: "I've heard this belief countless times," says St. John. This kind of thinking is harmful, he explains, because your beliefs guide your actions and, as such, become true. Say it and believe it and you will be forever saddled with debt. You won't be disciplined enough to manage your finances and get ahead. Ultimately you'll feel—and stay—stuck. “It’s straight-up self-sabotage," he says pointedly.
What to Say Instead: “I'm reliable and hard-working, and I will be rewarded with prosperity."
Why It Works: The point is, you can only be as wealthy as you believe you can be, and there's no reason, if you work hard, that you won't get there.
But, adds St. John, you also need to decide what "rich" means to you. Does it mean having an emergency fund big enough to cover a potential disaster? Does it mean saving enough for retirement that you won't have to worry? By putting good habits in place now, you'll set yourself up to build wealth, and keep it.
RELATED: Confessions of a Trust Fund Baby
And if you don't believe you can be rich, simply having more cash won't change that. "Money acts like a magnifying glass," says St. John. "Having money doesn't change anything—it reveals everything." By believing you're worthy of wealth, you're off to the right start.
2. 'Saving enough for retirement is impossible.'
Why It's Destructive: When it comes to money, there are few things that are actually impossible. "Thinking like this leads to frustration," says Judy McNary, a CFP® with Colorado-based McNary Financial Planning. "If you're focused on the negative, it creates a downward spiral, where you might very well end up putting your head in the sand and ignoring the need to save."
And just because you're ignoring the need to save for retirement doesn't mean that need will go away—in fact, the biggest mistake you can make when it comes to retirement is not getting started today. If you let yourself get overwhelmed by the thought of Retirement-with-a-capital-R, it's too easy to scare yourself into paralysis—and that's the worst thing you can do.
What to Say Instead: "I'm going to start saving a little bit today and watch my money grow."
Why It Works: The best thing about saving for retirement is that most of us have years to let our savings build ... which means we don't have to have all that money in hand right now.
If you invest your savings in a 401(k) or IRA, the interest will compound, meaning your money has the potential to literally grow over time. Consider, for example, that someone with 40 years until retirement would need to save only about $5,009 a year to end up with $1 million when he retires (assuming a 7% market return)—that's a little over $400 a month. But if that same person waits until there are only 20 years left until retirement, he would need to save nearly five times that much to reach that same million! That's not to say you can't start later if you must (like this woman, who started saving at age 48) ... but it will be infinitely easier if you start today.
3. 'When I have more money, I’ll be happier.'
Why It's Destructive: It just doesn’t work like that, says Joseph Duran, author of "The Money Code: Improve Your Entire Financial Life Right Now" and the C.E.O. of wealth counseling firm United Capital. “The perfect amount of money is always just a hair more than you have, no matter the amount.” Research has shown that, beyond a salary of $75,000, money simply doesn't buy more happiness.
After all, that's the idea behind the common expression. "More money, more problems." For most people, a higher salary means a bigger house, or a fancier car, or sleepaway camp for the kids ... and it's awfully hard to scale back once you get used to a new lifestyle. Hence lifestyle inflation, the budget-buster of would-be savers everywhere.
What to Say Instead: "I know what I want my life to look like. Money would allow me to do more of those things—but I can start doing them now."
Why It Works: If money can't buy happiness, there's no point in waiting to do the things that make you happy, whether that's spending time with loved ones, learning to paint or working for a nonprofit. “The goal is not just to have more money,” says Duran. "Rather, it's to figure out our purpose and meaning in life and set goals for the future. Now is the time to be who you want to be—on whatever scale is realistic."
4. 'I'll always be stuck in this job.'
Why It's Destructive: This thinking limits your reality to what you currently know, rather than letting you dream of what could be. "It's about giving yourself permission to succeed," explains St. John.
It's all-too-easy to get blinders on when you're not happy in a job. When you're overworked, under-earning or saddled with a bad boss, the light at the end of the tunnel may seem far away indeed. Remember: Whatever you don't like that's going on in this moment is only temporary ... if you want it to be.
RELATED: 9 Signs You've Got a Bad Boss
What to Say Instead: "I can have the career I want—I just need to start asking for it."
Why It Works: Even if it's easier to complain about where you are now, you want to pick your head up, start networking and recognize what skills you have and what's important to you in a position.
Once you have an idea of where you're headed, whether that's to the corner office or into another industry entirely, it's up to you to start making it a reality. "Nobody owes us anything, but in my career—and this is common among Gen X and Baby Boomers—I always assumed I wouldn't get what I wanted, so I didn't ask," recalls St. John. "You have to say, 'This is what I want.' It's that simple."
This thinking limits your reality to what you currently know, rather than letting you dream of what could be. "It's about giving yourself permission to succeed," explains St. John.
RELATED: What Are Your 'High-Earning Years?'
5. 'Nobody can afford college these days.'
Why It's Destructive: Simply put, it's defeatist. Yes, today's college prices will give you sticker shock, but that simply means you need a plan. And there are many ways to skin the cat called paying for higher education. Instead, you may want to pose a larger question: How does paying for college fit into my overall financial plan?
Remember the safety instructions you hear on planes—you’ve got to put your own mask before helping others? The same logic applies, says McNary. "I work with parents who will eat rice and beans for the rest of their lives in order to pay for their kids' college—it's a core value that's hard to mess with," she says. But what's more crucial is taking care of your own basic financial health first. "We often say that the government gives loans for college," she explains, "but they don't give loans for retirement."
What to Say Instead: "There's a college experience for my child that fits our budget ... and I'll find it."
Why It Works: Saving for college isn't impossible, and it's not all on your shoulders: Scholarships and financial aid exist for this reason exactly, as well as state-sponsored, tax-advantaged saving programs like 529 accounts (which accept contributions from friends and family as well). Before surrendering to the fear that paying for college is an insurmountable goal, start getting strategic about how you'll make it work for your family.
RELATED: Saving for College 101
6. 'I'll never be able to pay off this debt.'
Why It's Destructive: Telling yourself you'll never be able to eradicate your debt keeps a constant cloud over your head, McNary explains, but it doesn't keep you from spending!
She finds that when debt starts exceeding five digits, many clients no longer feel the urgency to pay it off. "Again and again," she recounts, "I've seen people wonder 'What's the difference between $30,000 I can't pay and $40,000 I can't pay?' They simply can't relate to such big numbers." By thinking your debt is permanent, you may very well keep digging yourself deeper into a hole.
What to Say Instead: "I can be a person who lives within my means, and that's a good start."
Why It Works: To turn it around, McNary advises, you need to start thinking about what you can do, whether that's taking a side job, consolidating your loans or attacking your highest-interest debt first. "The ultimate goal is to live within your means: If you start now, putting the extra money toward your debt, you'll reach the point where you're free. And the one thing everyone I've worked with who has paid off debt has in common is that they never plan to go back."
7. 'I always go a little over budget.'
Why It's Destructive: You can count on the fact that you'll always be $50 over budget. It's part of your charm, right? Wrong. Duran finds this kind of thinking particularly insidious. “Whether it’s overspending again or not saving for a vacation, this negative thinking suggests you’ve accepted these mistakes as your DNA and aren't changing,” he says.
What to Say Instead: "I can choose to make better decisions about my money."
Why It Works: Being financially responsible is all about making choices, Duran says, and there's no end to your opportunities to make better ones. "We're not rocks," he explains. "We're always changing." Will you increase your retirement contributions or spend $50 on iTunes? Will you set a savings goal in the LearnVest Money Center or put off saving for your dream trip to Argentina until next month? Your money choices aren't like your eye color—you can always change your mind.