Growth Mindset Through the Lens of Agency and Self-Efficacy
Managing Financial Stress During Periods of Economic Uncertainty
Believing you can get better (Growth Mindset) because you are the one in charge (Agency), and trusting that you have what it takes to succeed (Self-Efficacy), creates a powerful foundation for change.
Borrowing from Plato’s “Ship of State” metaphor, think of your life as a vessel in need of a navigator. In this setup, agency is taking the wheel instead of letting the “sailors” (other people and their opinions) steer for you, while self-efficacy is the confidence that you can navigate by the map and stars well enough to reach your destination. A growth mindset is the belief that you can keep learning and improving your course along the way.
Growth Mindset: belief that you can learn to navigate and improve your course over time.
Agency: the power to grab the wheel and choose your direction.
Self-Efficacy: the confidence you can steer the ship where you want to go.
Growth Mindset & Your Financial Life
The concept of growth mindset was developed by Stanford University psychologist, Carol Dweck, through decades of research on motivation, learning, achievement, and resilience. It explains how a person’s beliefs about their abilities can profoundly shape their behavior, resilience, and long-term success.
Dweck’s research led her to identify two common ways people think about ability:
Fixed mindset: believing abilities, intelligence, or talent are mostly permanent.
Growth mindset: believing abilities can improve through effort, strategy, learning, and feedback.
People with a fixed mindset often avoid challenges because failure feels like proof of inadequacy. People with a growth mindset tend to see challenges as opportunities to improve. For the later, failure becomes information rather than an identity.
Growth mindset principles are used in leadership training, sports psychology, therapy, and personal finance. Applying a growth mindset to your financial life means believing that money skills are not fixed traits but are abilities you can build over time through learning and practice. This perspective can improve the confidence and adaptability needed to navigate an uncertain economic world.
People with a financial growth mindset are often more willing to:
Learn new skills
Negotiate higher salaries
Switch careers
Start a business
Adapt to technological change
In this way, adaptability itself becomes a financial asset.
Financial Stress During Economic Uncertainty
The National Endowment for Financial Education’s 2026 financial well-being poll revealed that many Americans remain financially vulnerable. Only 36% felt confident they could cover an unexpected $2,000 expense, and a significant portion of respondents reported feeling financially “behind.” Only a small percentage consistently had money left over at the end of the month.
88% of respondents reported feeling some form of financial stress as they begin the new year [2026] and 77% said they experienced a financial setback in 2025.
Financial stress is a psychological state that can occur when a person’s financial problems or worries feel greater than the resources they have available. It involves how people personally view and respond to their financial situation, both emotionally and mentally. It can include feeling that there is not enough money or financial resources and feeling a lack of control over one’s financial situation.
Financial stress tends to increase during periods of economic uncertainty (inflation, job instability, or market volatility). Even people with stable finances may experience anxiety because uncertainty itself can activate stress responses. The human brain is psychologically wired to seek predictability and security, so when the economy becomes unstable, the brain often interprets financial uncertainty as a threat.
When under stress, people are more likely to rely on short-term thinking, avoid planning, or make impulsive decisions, which can worsen long-term financial outcomes.
Psychological and physical effects of financial stress can include:
Anxiety and chronic worry
Depression and hopelessness
Insomnia
Headaches
Fatigue
Elevated blood pressure
Muscle tension
With money being one of the most common sources of relationship conflict, financial stress can increase arguments and withdrawal within partnerships and families.
Together, mindset and stress management matter because they shape how people behave in financial situations:
Without a growth mindset, financial setbacks can feel permanent.
Without self-efficacy, people may avoid financial decisions altogether.
Without agency, people may feel powerless during economic uncertainty.
Daily Growth Mindset Routine
Creating a simple daily routine grounded in growth mindset, agency, and self-efficacy can shape how you think about money, how you respond in the moment, and how confident you feel in your ability to follow through.
Research consistently shows that self-efficacy is strongly linked to better financial behaviors and overall financial well-being. If people believe they can manage money well, they’re more likely to act in disciplined, constructive ways with money, and those actions are what improve their financial well-being.
Think of the examples below as a starting framework that you can adapt, and use as inspiration to create a daily routine that works for you.
✨Set the direction for the day through agency:
Take 2–5 minutes to intentionally “take the wheel” for your day.
Ask yourself:
“What is one money decision I will be intentional about today?”
“Where do I need to stay mindful with saving or spending today?
Examples: “I will not impulse-buy lunch,” or “I’ll review my account balance before spending.”
This reinforces that you are actively steering your financial behavior, not reacting to it.
✨Building awareness through self-efficacy:
Check-in with yourself throughout the day to help you manage money decisions:
What did I already do well today financially?
Did I pause and think before spending?
Wins matter (not buying something, sticking to a plan, checking your balance). This builds self-efficacy: “I can actually do this.”
✨Growth mindset and agency during spending moments:
Before making non-essential purchases - pause and ask:
“Is this aligned with my values or the goals I have set for myself?”
“What choice would support the person I’m becoming and the money habits I want to build?”
This helps reframe spending decisions as opportunities to practice intentional habits and strengthen confidence in your ability to make aligned choices.
✨At the end of day spend a few minutes to reflect on:
One financial decision I handled well today (self-efficacy).
One moment I took control instead of reacting (agency).
One thing I learned or could improve (growth mindset).
Applying a growth mindset to your financial life is about training your mind to see money as something you can actively shape, rather than something that simply “happens to you,” so you can take a more intentional and empowered role in your financial decisions.
If you’ve made it this far, thank you for reading!!!
I hope today you are met with kindness, especially from yourself.
References
Dare, S. E., Van Dijk, W. W., Van Dijk, E., Van Dillen, L. F., Gallucci, M., & Simonse, O. (2022). How executive functioning and financial self-efficacy predict Subjective Financial Well-Being via positive financial behaviors. Journal of Family and Economic Issues, 44(2), 232–248. https://doi.org/10.1007/s10834-022-09845-0
Dweck, C. S. (2007). Mindset: The New Psychology of Success. Ballantine Books.
Licsw, C. G. O. P. (2025, April 22). The Psychological Toll of Uncertainty: A Neuroscientific Perspective - Counseling and coaching for your quarterlife crisis. Counseling and Coaching for Your Quarterlife Crisis. https://quarterlifecenter.com/psychological-toll-of-uncertainty/
National Endowment for Financial Education. (2026, January 29). POLL: Americans feeling financial stress to begin 2026. National Endowment for Financial Education. https://www.nefe.org/news/2026/01/poll-americans-feeling-stressed-to-begin-2026.aspx
Simonse, O., Van Dijk, W. W., Van Dillen, L. F., & Van Dijk, E. (2024). Economic predictors of the subjective experience of financial stress. Journal of Behavioral and Experimental Finance, 42, 100933. https://doi.org/10.1016/j.jbef.2024.100933
Comments