Financial psychologist reveals the most common misconception about feeling rich and provides strategies to overcome it.

Numerous Americans hold the belief that in order to feel affluent, they must attain a specific financial goal.

Even if individuals achieve their financial goals or exceed them, they may still be dissatisfied with their finances, according to Charles Chaffin, co-founder of the Financial Psychology Institute and a professor at Iowa State University.

"According to him, the common misconception is that achieving a specific amount of wealth will instantly make people feel wealthy. However, he emphasizes that wealth is a subjective experience and encompasses more than just one's financial status."

Recent data from Northwestern Mutual's 2024 Planning & Progress study reveals that only 32% of American millionaires feel financially secure.

Your internal beliefs about money can significantly impact whether you feel wealthy or not, regardless of the elevated prices of everyday goods and other economic factors, according to Chaffin.

According to Chaffin, one reason why people may not feel satisfied with their money is because they focus too much on the amount they have rather than the value they receive.

Be wary of obsessing over your spending

Chaffin claims that millionaires are typically "money conscious."

Analyzing money inflows and outflows consistently is a characteristic of money vigilance, one of the four money scripts developed by financial psychologists Brad and Ted Klontz.

"Chaffin states that monitoring their spending has been one of their great successes, but they still feel insecure."

DON'T MISS: How to master your money and grow your wealth

It's crucial to monitor your spending, regardless of your financial status, to prevent overspending and living beyond your means. However, being overly fixated on your spending can distort your perception of your financial situation and make you believe you're not as wealthy as you truly are, warns the expert.

Chaffin says that being obsessed with working out is no different than someone who is obsessed with fitness and feels like they are never in shape.

To achieve your financial goals, it's crucial to determine what you want to accomplish with more money, according to Chaffin. If you don't shift your internal beliefs about money, you may still experience anxiety around it, even if you become a millionaire.

"When someone tells me they'll be wealthy when they reach 2.7 million, I ask, 'What then?' What happens next? How will it improve your life? Let's be specific."

Goal setting can help you achieve financial satisfaction

If you can meet your daily needs and have a fully funded emergency fund, you may be financially secure. However, if you're still not content with your financial situation, it might be necessary to reevaluate what wealth means to you, according to Chaffin.

"While having enough money for security is important, it's also crucial to consider the purpose of the money beyond that level," he advises.

Having specific financial goals can prevent the feeling of "never being satisfied," according to him.

Instead of just aiming to become a millionaire, you may set a goal to earn enough money to support your family or to quit your job and travel the world, according to Chaffin. Being wealthy isn't always tied to a specific dollar amount.

"The wealthiest people I know have little money in their bank accounts, but they have a support system if anything goes wrong," he says. "That's also wealth."

Sign up for CNBC's online course to master your money this fall. Our practical strategies will help you hack your budget, reduce your debt, and grow your wealth. Start today to feel more confident and successful. Use code EARLYBIRD for a 30% introductory discount, extended through September 30, 2024, for the back-to-school season.