Internal vs external locus of control
Hey Smarty Pants,
You ever hear the saying "The harder I work, the luckier I get" - - well, if you haven't, now you have. And it's 100% true. So let's talk about why and how this relates to you becoming financially stable and successful.
There are a lot of aspects to our mindset that will help or hurt us financially.
People talk about scarcity vs abundance mindsets.
Fixed vs growth mindset.
Cat vs dog mindset (okay, I made that last one up, but I think there’s potential…)
Today I want to talk about your mindset around control - - because who you think has it in your life will change your life for the better or worse.
Today, we’re going to talk about an internal locus of control vs an external locus of control and how that relates to your financial success.
Let me illustrate: you know those people who always blame others for when bad things happen to them - they got a bad grade and it’s because the teacher doesn’t like them or their boss made them work too much so they didn’t have time to prepare.
And then you also know people who get a bad grade and say, “I wasn’t prepared. Next test I’ll be sure to spend more time studying so I am properly prepared”
The difference between them isn’t that one’s simply flubbing off responsibility (even though that’s what it looks like to the outside observer). The difference is that one has an internal locus of control and the other has an external locus of control.
People who attribute their successes or failures to what is under their control, have an internal locus of control. They say, “I worked really hard for that raise” On the flip side, people who attribute their successes or failures to outside factors have an external locus of control. They may say “I just got that raise because I was lucky my department did well this year.”
Basically, an internal locus of control means you believe you determine your success or failures whereas an external locus of control means whether or not you succeed is dependent on outside factors, things you have no control over.
Now, when psychologists study these types of people, they find that people with an internal locus of control tend to fare better than those who think their fortunes are at the whim of others.
And this makes a lot of sense. If you believe that you can get a raise if you go above and beyond and do really well at work, you’re far more likely to get that raise than someone who doesn’t believe what they do makes a difference.
This also applies to people’s failures. If you have an internal locus of control and you don’t get that raise, you’d attribute that to you not doing well enough at work rather than blame your boss, your coworkers, or just bad luck.
So how does this relate to our money?
People who believe that their success is up to them will work the extra hours, or get that certificate, or go above and beyond - and over the course of their lifetime, this will net them better jobs with better pay - they tend to be more successful. They will take responsibility for their financial situation and if their financial situation isn’t pleasing to them, they will do what’s necessary to make it pleasing to them.
Whereas, if you believe that your success is up to your boss, or your teachers, or the hiring manager, you are far less likely to take the steps necessary to get a better job, get a raise, learn about proper money management, etc. because in your heart, you would “know” that nothing you do makes a difference.
Now, I’m not saying having an internal locus of control is guaranteed to make you successful or that it’s always better than having an external locus of control.
People with a strong internal locus of control may be overly hard on themselves, they may get more cutthroat believing that success is entirely dependent on them, making them bad team players. Whereas someone with an external locus of control believes their success is dependent on how well the team does, so they’re more likely to be supportive of coworkers.
I’m speaking in generalizations - - psychology is a social science, not a hard science. (Are my years in academia showing…?)
It’s important to recognize that no man is an island. That the only thing you control is your own actions. Sometimes you can do everything right but factors outside of your control keep you from getting the promotion.
How do you know where you believe your locus of control is? Well, do you think the world happens to you or do you believe you make things happen?
As with so much, it’s a spectrum. Some situations you may feel you have more control over than others.
How do you cultivate a healthy internal locus of control?
Instead of thinking that things happen “to” you, understand that there are lots of variables that you can change to increase the odds of your success. There will always be outside factors, and sometimes you do everything right and will still fail - - but more often than not, by believing that you determine your own fate, you will take the right actions to change your life for the better.
When it comes to your money, recognize that there is a lot you are in control of. If you know nothing of personal finance, that’s a great place to start learning and I recommend check out my Instagram/YouTube, hit the public library and start with "The Millionnaire Next Door", but I have personal finance book reviews on my You Tube channel if you are looking for something else.
Know that if you are in a dead-end job, you can figure out a plan to leave it. You can take a night class, get an online certificate, start going to networking events, get active on LinkedIn.
If you are making more money than ever but still stressed about cash, learn about budgeting or hire a financial coach. (hint hint!)
In writing all this about internal vs external locus of control, I realize I have my own issues with it that I'll need to work on. But, thanks to G I Joe, knowing is half the battle. As I get better with this, I'll let you in on how it's going with me.
Hope this helps!
Cheers,
Kate