What’s driving your behaviour with money? 

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Personal Finance
Team MONEYME|28 February 2023| 3-minute read

You might think your money habits are set in stone. A certain amount of money comes into your account each fortnight. You spend some. You (hopefully) save some. There’s not much you can do to change it—short of an unexpected windfall.

But, what if there’s more to the picture? What if it’s not so much your job or pay packet that’s driving your relationship with money, but your psychology? 

Let’s dive into the hidden emotional depths that influence the way we spend and save.

Your experiences matter 💸 

What happened to you yesterday affects how you see money today.

If, as a child, you heard your carers struggling to make ends meet, you may have gained an expectation of future hardship. If, as a young adult, you dabbled in investing, the outcome of your decisions then probably informs how you invest now. 

As Morgan Housel writes, your experiences comprise around ‘0.00000001%’ of the world’s experiences, but around 80% of ‘how you think the world works’.

Step one is to consider your experiences and analyse how they’re impacting you.

Can’t get no satisfaction 🤨 

Another influential factor is your changing levels of satisfaction.

Have you noticed that the more you earn, the more you need? Do you compare your lifestyle with others’, then spend extra to keep up?  

The key to mastering your money is adjusting your lifestyle, so it’s within your means. Even more important is stabilising your money habits. That means spending the same amount each week—regardless of a boost in income or the desire to own your neighbour’s new car—and saving what’s left over. That way, you’re building future wealth over immediate satisfaction. It’s the old (but true) short term pain for long term gain.

In it for the long term 💰 

Financial success doesn’t happen overnight. Building wealth often takes time—and can be slow-going. Been dreaming of landing a life-changing stock? It’s time to adjust your mindset.

Whether you’re trying to build your wealth or a career, the key to winning is hanging around—through the tough times and for a long time. Avoid jumping on fads or believing there’s a shortcut to significant financial gain. Often those alternatives are risky and only have a few winners. Most financial success depends on one small win after another, over years and years.

Thinking positive​ 

It’s easier to form a pessimistic narrative than an optimistic one. That’s especially true when the media is bombarding you with reports of increasing interest rates, exploding inflation and stagnating wages. Chances are, many of your friends and family have taken on the sad story, too.

But, it’s hard to do well without the belief that you can, and will, do well. Catch yourself telling yourself things like, ‘I can’t save’ or ‘It’s impossible to get ahead’? Shut those thoughts down and turn them into positive affirmations instead.  

Time for a change? 🤸 

Like building wealth, changing the psychology behind your money habits is a step-by-step process. But there’s no time like now to get started.

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