November 28, 2023

Unlearning the bad money habits holding you back

Written and accurate as at: Nov 13, 2023 Current Stats & Facts

For financial educator Vanessa Stoykov, changing our attitude towards money means first understanding all the things that shaped it in the first place.

By Vanessa Stoykov

In this exploration of unlearning bad money habits and challenging our beliefs about money, we’ll embark on a journey of financial self-discovery. Money holds a significant place in our lives, shaped by our past experiences and beliefs.

It’s time to recognise these influences, assess our current financial situations honestly, and create a path toward positive change.

Childhood influences on financial beliefs

Our financial beliefs often start within the walls of our childhood homes. The attitudes and behaviours of our parents regarding money can silently shape our beliefs about finances in profound ways. Think back to your formative years. Were your parents’ thrifty savers, diligently watching every penny, or were they carefree spenders, living in the moment without concern for future financial consequences?

If your parents were diligent savers, you may have inherited their thrifty habits, nurturing a knack for saving and planning. Conversely, if they were inclined towards impulsive spending, you might have unconsciously adopted a preference for instant gratification, making it challenging to save for long-term goals.

Recognising these influences is the first critical step towards understanding your current financial beliefs and habits. It’s essential to acknowledge that while your past experiences have shaped your money mindset, you have the power to reshape these beliefs for a brighter financial future.

Assessing your current situation honestly

Now, let’s delve into the present – your current financial situation. This step may feel uncomfortable, but it’s an absolute necessity. It’s time to face the numbers head-on. Gather your bank statements, compile your bills, and lay out your financial landscape for close examination. What do you see?

This exercise might reveal that you’re effectively managing your expenses, consistently saving, and investing for your future. If that’s the case, congratulations – your financial habits are in good shape. However, for others, this exercise may unveil a different reality – substantial debt, depleting savings, or a paycheck-to-paycheck existence.

The importance of this step cannot be overstated. Understanding where you stand financially is akin to knowing your precise location on a map; it’s the only way to chart a course towards financial stability and prosperity.

The influence of those around you

Let’s shift our focus to the people in your life – family, friends, and colleagues. The company you keep significantly impacts your financial beliefs and behaviours. Take a moment to evaluate your inner circle. Are they financially prudent, carefully budgeting, and building a secure financial future? Or do they exhibit more impulsive spending habits, constantly chasing immediate pleasures?

The influence of your social environment can be subtle yet potent. If you’re surrounded by individuals who prioritise financial responsibility, you’re more likely to adopt similar habits. Conversely, if your close circles are characterised by lavish spending and disregard for long-term financial planning, it can be challenging to resist those influences.

Surrounding yourself with financially responsible people can provide you with invaluable support and motivation as you embark on the journey to unlearn bad money habits.

A plan for gradual change that is achievable

Transforming your financial habits isn’t a sprint; it’s a marathon. The key is to start small and maintain consistency. While New Year’s resolutions can be tempting, they often lead to disappointment because they’re unrealistic and unsustainable. 

Instead, what you need is a plan for gradual, sustainable change. Break your financial goals into manageable, bite-sized steps. If you’re wrestling with credit card debt, set a modest target to pay off a portion each month. As you achieve these incremental goals, you’ll gain confidence and build momentum.

Celebrating milestones to keep momentum up

As you journey towards financial transformation, it’s crucial to celebrate milestones along the way. These celebrations serve as reminders of your progress and keep you motivated. They don’t have to be extravagant; a small treat or a simple acknowledgment of your achievements is enough.

The significance of celebrating milestones lies in the psychological boost it provides. It reinforces your commitment to unlearn bad money habits and reminds you that you’re on the right path.

Your financial journey

Your journey to unlearn bad money habits and challenge your beliefs about money is a transformative process. It’s deeply rooted in your past, influenced by your present environment, and driven by your determination to create a better financial future.

It is not a straight line and takes a lifetime to master. But you have the power to make changes and reap the benefits. You have come this far – I know you can do it.

This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, you should consider whether the information is appropriate in light of your particular objectives, financial situation and needs. Lighthouse Financial Group has financial advisers that are authorised to provide personal financial advice. Call 02 8215 1511 for more information on our available services.

In this article:
For financial educator Vanessa Stoykov, changing our attitude towards money means first understanding all the things that shaped it in the first place.
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