Understanding your money mindset
Date: 16 Dec 2024
Understanding your money mindset
A simple, clear, applicable approach to personal financial planning can make everything feel less daunting! Whatever our current financial situation, developing a healthy money mindset can help us to create a practical saving framework that will build long-term financial security.
Financial planning involves more than just numbers - our relationship with money goes much deeper. Money can cause more stress in relationships and marriages than any other factor. This stress affects our mental health and daily decisions.
Identifying emotional barriers to saving
The reality is stark!
70% of Kiwis are experiencing money-related stress.Several emotional barriers may affect our personal financial planning:
- Fear of the future and financial instability
- Anxiety about making financial decisions
- Guilt about prioritising saving over immediate desires
- Shame about past financial mistakes
- Financial abuse
Breaking negative financial habits
Our brain naturally prefers instant gratification over delayed rewards. This explains why immediate purchases often win over long-term saving goals. A new phone or outfit brings temporary satisfaction, and creates a cycle of continuous spending to maintain that emotional high.
Building a positive relationship with money
"Money management requires a change from seeing saving as a sacrifice to viewing it as an investment in our future"Only them will be able to focus on feeling satisfied and proud as our savings grow each month!
Making small changes like:
- Setting meaningful goals that match our values
- Using anticipatory happiness as we save for future expenditures
- Celebrating small wins during our saving process
- Automating our savings to remove emotional decision-making
Believing spending leads to happiness sets us up for disappointment. Understanding our emotional connection to money helps create a more comprehensive approach to financial planning.
