"Þetta reddast?" You Better Not Use That Mindset With Your Finances
Reading time: 9 min
There is a phrase every Icelander knows. You have probably said it yourself a hundred times — maybe even today.
Þetta reddast: it will work out, it will sort itself out, everything will be fine.
And in many ways, it is a beautiful phrase. It speaks to resilience, to optimism, to the quiet Icelandic strength that gets people through hard winters, financial crises, and volcanic eruptions. There is real power in that attitude.
But when it comes to your money?
Þetta reddast might be the most expensive belief you carry.
Because the more people I meet and coach, the more I have started to see another side of it. A toxic side. And I have watched this mindset quietly destroy people’s financial lives — not with one dramatic crash, but slowly, month by month, year by year.
That is exactly why I decided to write this article.
The more conversations I have with people about money, the more I notice the same thing.
People are stressed. Overwhelmed. Living paycheck to paycheck, carrying debt, constantly anxious. Yet many still approach their finances with complete passivity.
No plan. No goals. No structure. No ownership.
Just þetta reddast.
Salary comes in. Bills go out. Credit cards get used. Stress builds. Complaining increases. And somehow people still expect things to magically improve — without changing a single thing about their behavior.
But no. It does not always reddast.
Not when you ignore your spending habits. Not when you avoid difficult conversations about money. Not when you keep buying things to impress people you do not even like. Not when you refuse to face reality.
Hope is not a financial strategy.
There is a concept I want you to sit with: drifting.
Drifting is what happens when you move through life without intention. No clear direction. No real goals. Just going wherever the current takes you. One month bleeds into the next. The years add up. And somehow you are still in the same place — or worse, further behind than where you started.
Most people are drifting financially. They are not making active, conscious decisions about their money. They are just reacting. Paying bills when they arrive. Spending what is left. Hoping something will change.
That is not a financial plan. That is þetta reddast in action.
And here is the uncomfortable truth: things do not just sort themselves out. Not with money. Money requires attention, intention, and direction. Without those three things, it disappears — slowly, quietly, and consistently.
If you do not decide where your money should go, someone else will decide for you. Advertising will decide. Social pressure will decide. Your impulses will decide.
And then people wake up years later — stressed, exhausted, financially trapped — wondering what happened.
Here is something I have noticed again and again — and I say this with no judgement, because I have been there too:
Most people are very good at complaining about their financial situation. And very bad at actually doing something about it.
The rent is too high. Inflation is out of control. The government is not doing enough. Interest rates are brutal. Wages are not keeping up.
And you know what? A lot of that is true. The system is far from fair. Life is genuinely expensive right now.
But here is the question nobody wants to ask: what are you doing about it?
Not what should the government do. Not what should your employer do. Not what should the banks do.
What are you doing?
Because complaining without action is just noise. It feels like something — it feels like awareness, even like resistance — but it changes nothing. Nothing in your bank account, nothing in your future, and nothing in your life.
It is much easier to complain than to take responsibility. It is easier to say life is unfair than to admit you have been financially undisciplined for years. It is easier to blame the system than to face the fact that you have no goals, no direction, and no real control over your spending.
The people who complain the most are often the ones who look the least inward. And meanwhile, the months pass, the debt grows, and þetta reddast keeps them comfortable in their inaction.
There is something that has genuinely surprised me — and I think it is worth saying out loud, even if it stings a little.
I have met foreigners living in Iceland who are doing financially better than many of the people around them.
Not because they necessarily earn more money. Many of them do not.
But because they approach life with a completely different mindset.
Many immigrants come here with very clear goals. They know exactly why they are working. They save aggressively. They sacrifice short-term comfort for long-term gratification. They are intentional.
They work toward something.
And I have seen the proof of this with my own eyes — not once, not twice, but enough times that I can no longer ignore it.
I have seen foreigners manage to buy an apartment in one of the highest interest rate environments Iceland has seen in recent years — often earning less than the people sitting next to them at work.
Now, buying an apartment in Iceland is not simple. Before you can even apply for a mortgage, every bank is required to carry out a greiðslumat — a credit and affordability assessment. The bank collects your tax returns and income information from the Directorate of Internal Revenue, and gathers information on any debt you hold with other credit institutions.
The Central Bank of Iceland sets strict rules: your monthly mortgage payments may not exceed 35% of your disposable monthly income — or 40% for first-time buyers.
And before any of that begins, the bank finances up to 80% of the purchase price — or 85% for first-time buyers — meaning you must have a minimum down payment of 20%, or 15% if you qualify as a first-time buyer.
For simplicity, I am not including the HMS Equity Loan program, which may allow eligible buyers to purchase a home with a lower down payment.
But that down payment is where the real story lives.
Yes, interest rates are high right now — nobody is denying that. But let us put this in perspective. During the 2008 financial crisis, Iceland’s central bank policy rate peaked at 18%. Today, the Central Bank’s key rate sits at 7.75%. That is still significant — but it is not even close to what people faced in 2008 and the years that followed. And yet, even through those brutal years, people still managed to save, buy homes, and build financial lives. The rates were higher. The conditions were harsher. And somehow, it still happened.
So what is different now?
Part of the answer is this: we have never had more ways to spend money than we do today.
A generation ago, if you wanted something, you either saved for it or went without. Today, the friction has almost completely disappeared. You can tap your phone and buy something in seconds. You can split purchases into monthly payments. You can delay the pain of paying while enjoying the reward immediately. Even everyday expenses can now be financed.
The problem is not the technology itself. The problem is that it encourages short-term thinking. It makes spending feel easy and painless, while hiding the long-term consequences.
The barrier between wanting something and having it has essentially disappeared. And when instant gratification becomes normal, self-discipline becomes more important than ever.
Meanwhile, social media and coffee conversations are full of the same complaints — from Icelanders and foreigners alike. Life is too expensive. Interest rates are too high. The housing market is impossible. And yes, some of that is completely valid. Life in Iceland is genuinely expensive, and the challenges are real.
But then there are those few — and they exist among both Icelanders and foreigners — who have a completely different relationship with money. They live in the same Iceland. They face the same interest rates, the same housing prices, the same economy, and the same endless temptations to spend. Yet somehow they manage to save. They reach the down payment. They pass the greiðslumat. They find ways to invest what is left over. They are not waiting for perfect conditions, because they understand that perfect conditions never arrive.
The difference between them and everyone else is not luck. It is not a higher salary. It is not connections or privilege.
It is mindset. It is discipline. It is the ability to find ways to make things work — instead of finding reasons why things cannot.
The more cases I see, the more I realise something uncomfortable: for many people, the obstacle is not the economy, the interest rates, or the housing market.
The obstacle lies somewhere else entirely. Somewhere nobody really wants to look.
It lies in the mirror.
This is why goals and values matter so much.
If you do not know what you actually want from your life, you will spend your money trying to figure it out in real time. A holiday you cannot afford because you are burned out. Clothes that signal a version of yourself you wish you were. Nights out to feel something. Subscriptions you forget about. Gadgets you stop using after a week.
None of these purchases are random. They are filling a void. And that void exists because most people have never sat down and seriously asked themselves: What do I actually value? What kind of life am I building? What does financial security mean to me?
Without answers to those questions, money has nowhere to go except out the door.
When you are clear on your values, spending becomes easier to manage — because the decision is already made. You know what matters. Everything else is just noise, and you can say no to it without guilt.
Þetta Reddast Is Optimism Wearing a Mask
At its core, þetta reddast contains a quiet but dangerous belief: that something outside of you will fix things.
Time will fix it. The economy will turn. You will get a raise. Luck will strike.
And maybe — occasionally — that happens. But building a financial life on that hope is like building a house on sand.
Real financial stability does not come from waiting. It comes from deciding. Deciding what matters, deciding to learn, deciding to act — even when it is uncomfortable, even when you do not have all the answers.
There is nothing wrong with optimism. But optimism without action is just avoidance wearing a positive mask.
Financial peace does not happen accidentally. You build it. Slowly. Intentionally. Sometimes painfully. You build it by setting goals, understanding your values, learning discipline, taking ownership, and making difficult decisions consistently over time.
The people who turn their finances around do not do it because circumstances magically changed. They do it because they changed — their thinking, their habits, their relationship with money.
That is not easy. But it is available to every single person reading this.
What Do You Actually Do?
Stop drifting. And start steering.
That means sitting down — seriously, with a pen and paper or a spreadsheet — and asking yourself:
* “What are my actual financial values? Security? Freedom? Family? Travel? Early retirement?”
* “What does my ideal life look like in 5 years — and what does it cost?”
* “What am I currently spending money on that has nothing to do with those values?”
* “What have I been complaining about that I could actually start taking action on today?”
These are not comfortable questions. They are confronting ones. But they are the beginning of everything.
Þetta reddast is a wonderful phrase for a snowstorm. For a power outage. For a car that will not start on a Monday morning.
But for your financial future?
You better have a better strategy than that.
Now, what is one financial habit you have been putting off because you figured it would sort itself out? I would genuinely love to hear from you.
Remember, you do not have to figure everything out on your own. If you feel stuck, unsure where to start, or simply want a fresh perspective on your finances, I am here to help.
Together, we can look at your current situation, set clear financial goals, and create a realistic plan for where you want to be in the next few years. We can review your spending habits, build a budget that fits your lifestyle, create a strategy to pay off debt, or take the first steps toward investing and building wealth.
The most important thing is to start taking control of your finances instead of hoping things will somehow work themselves out. Small actions today can make a huge difference in your future. The longer you wait, the harder it often becomes to break the cycle of financial stress and growing debt.
Your financial future is not decided by where you are today, but by the decisions you make from this point forward.
