Updated: May 11
As a small business owner, you know that your mindset plays a crucial role in your success. And when it comes to money, your mindset can either hold you back or propel you forward. But have you ever stopped to consider the neuroscience behind your money mindset?
In this blog I will explore how your brains perceive and respond to money, and how you can use this powerful knowledge to positively develop your money mindset and grow your business.
How the brain responds to money
Money is a powerful motivator, and our brains are wired to respond to it in unique ways. Research has shown that when we receive money or anticipate money coming to us, our brains pleasure centre, the ventral striatum, gets excited! This releases dopamine, a neurotransmitter associated with pleasure and reward. In other word our brains are rewarding us for going after financial gain.
On the other hand, when we experience a financial loss or anticipate a set back (for example, a client decides to move on or we’re investing in something new) our brain’s amygdala – the emotion processing zone – gets activated. This can trigger a stress response, resulting in emotions like frustration, anxiety or fear. As a small business owner, you are likely to feel a heightened emotional response because you feel a greater sense of responsibility for the success or failure of your business.
The power of positive thinking
Given the brain’s response to money, it’ll come as no surprise that developing a positive money mindset can be a game changer for small business owners. When we remove our limiting beliefs about money and practice a good relationship with it, we’re more likely to:
- Feel motivated to financially grow our businesses.
- Take calculated risks and invest in growth – both for ourselves and our business.
- Develop resilience through challenges – particularly those our of our control (I see you COVID and economic crash).
One way to positively impact your relationship with money is through regular gratitude practice. Research has shown that regular gratitude practice improves happiness and well-being. It moves us from a lack mindset to an abundance mindset and allows us to feel more optimistic about our financial goals.
Another powerful tool in cultivating a positive money mindset is journaling. Through journaling we can explore the money stories we’re telling ourselves that are not serving us.
Stories like, money is hard to come by, or money is the root of all evil. We can then start to challenge those stories and develop new positive beliefs about money.
I provide daily gratitude practices and weekly journal prompts in my membership The Mindset Place.
The importance of changing our mindset
Developing a positive money mindset is essential and it’s also important to identify and release any limiting beliefs or negative thought or behaviour patterns that may be holding you back. These beliefs can be held very deeply in the unconscious and may need external support from a coach to shift. Get in touch to chat about how I can help with that.
Many small business owners suffer with imposter syndrome, a feeling that they’re not qualified or deserving of their success. This belief can lead to self-doubt and hesitation when it comes to pursuing financial gain. By shifting the limiting beliefs, you can feel more confident in your ability to succeed.
Two very common limiting beliefs about money are: money is hard to come by and rich people are greedy/ selfish/ evil. These beliefs lead to a scarcity mindset and reduce the ability to make money. Recognising there is enough wealth to go around and that you will still be the amazing person you are with or without money, will allow you to embrace an abundance mindset and feel empowered to take action towards your financial goals.
Understanding the neuroscience of money mindset is empowering. It’s a fascinating tool which, when utilised through gratitude, journaling, coaching or other mindset practices will ultimately transform your business and your life.
In this blog I have referred to research to support my assertions.
Here are some sources that support the points made:
- Kuhnen, C. M., & Knutson, B. (2005). The neural basis of financial risk-taking. Neuron, 47(5), 763-770.
- Knutson, B., Rick, S., Wimmer, G. E., Prelec, D., & Loewenstein, G. (2007). Neural predictors of purchases. Neuron, 53(1), 147-156.
- Emmons, R. A., & McCullough, M. E. (2003). Counting blessings versus burdens: An experimental investigation of gratitude and subjective well-being in daily life. Journal of personality and social psychology, 84(2), 377.
- Johnson, M. W., & Tricomi, E. (2011). Neural correlates of ingroup bias in monetary allocations. Culture and Brain, 1(1), 35-50.
- Burgoyne, C. B., & Rutherford, A. (2019). The neuroscience of growth mindset and intrinsic motivation. Frontiers in Psychology, 10, 1816.
- Dweck, C. S. (2006). Mindset: The new psychology of success. Random House Digital, Inc.