Money Behavior = Habits + Attitudes. What's Yours? And, Is This Something You Can Control?
Your unconscious biases and beliefs control your behaviors. Especially when it comes to finance.
Have you ever set a financial goal only to find yourself constantly falling short or unable to enforce it year after year?
Typically, financial behavior is believed to be the result of external factors such as your existing circumstances, the number of dependents, extent of your commitments and so on. However, I recently concluded that a certain degree of these behaviors may be innate, regardless of your circumstances.
For example, one may expect that as your income grows, you have a greater tendency to spend more since the quality of your life and your surrounding social circle is likely to grow as well. On the flipside, someone who has 3 kids to support and a number of financial commitments may be more prudent when it comes to expenses even if they were to experience the same income growth.
However, this isn’t always the case. Overspending can still be a problem for high income earners (about $30,000 a month) such as these 3 individuals who chalked up millions in debt due to gambling, investments, and business.
Why is this the case?
It depends on our money ‘habitudes’ which comprises of:
1. Habits
Our automatic reaction towards money that is repeated regularly.
2. Attitudes
Our automatic thought of feeling depending on our past experiences, upbringing, personality or surrounding culture.
The combination of your habits and attitude towards money (‘habitudes’) make up your financial blueprint of money behaviors.
Example 1:
Alex grew up in a household where money was constantly taken from him and not returned. Now, when Alex receives money, his attitude is that he fears it will be taken away from him. Thus, his habit is to hide it from his wife immediately.
Example 2:
Alice’s family regularly brought her and siblings out for meals and gave them gifts on special occasions. Now, when she gets her paycheck, she prioritises treating her loved ones and has a very giving nature towards it.
Is there an ideal ‘habitude’?
There are many frameworks when it comes to the psychology of money. In my example, I used Syble Solomon’s framework of 6 different money ‘habitudes’: Security, Planning, Status, Giving, Spontaneous, Carefree.
Each ‘habitude’ is neither good nor bad. Every person has a mix of all 6 types with some being more dominant. If left unchecked however, overusing or underusing each ‘habitude’ may present challenges that get in the way of you achieving your goals or working towards your ideal self, such as:
Understanding your partner’s financial ‘habitudes’ and the story behind it
Discovering the subconscious reason why your financial goals are not sticking
Building the foundation for positive financial habits of success you would like to keep
Ideally, the purpose of finding out your personal money ‘habitudes’ is to uncover the negative “money scripts” that you may have carried from past experiences. This brings you closer to reinforcing positive money habits and disarming yourself of negative ones so you can live your best life.
If you’ve found this content useful or are curious about understanding your money psychology, I would like to invite you to an upcoming seminar where you can discover your money ‘habitudes’.
Read more about “Dating Your Money: Understanding Your Money Psyche” and sign up here!
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Dating Your Money: Understanding Your Money Psyche is the 2nd of a series of LGBTQ+ finance seminars held by Fin//Ally (Natalia and Geraldine).
If you’d like to hear of more LGBTQ+ related financial content, or stay in the loop on our upcoming financial seminars, please subscribe to our Telegram channel!
past seminars:
LGBTQ+ Home Ownership: Have Your Own Home In 5 Years
Cheers
