Category Archives for Habits

How We Learn About Money

When were you taught about money? Probably you weren’t. Many of our financial habits emerge from the messages we absorbed growing up. We observe how family members behave around money and believe this is ‘normal’.  As you’ll know from other experiences, these early ‘lessons’ are incredibly powerful and hard to unlearn. Childhood events are greatly magnified and dominate our thinking, often unconsciously.

If, for instance, you grew up in a household where the breadwinner held all the power, there’s a good chance this still affects your beliefs – either you strive to earn more money than your partner or feel relegated to a lower status. Through working with clients, I’ve seen repeatedly that intellectually we understand that money shouldn’t equal power (especially in a relationship), but emotionally we return to such ideas when we’re stressed or anxious. As few of us are willing to talk openly about money, these unhelpful self-limiting beliefs remain unchallenged.

Some people, especially women, believe that they don’t deserve to have money. Perhaps they grew up with a mother who struggled to make ends meet and there was never any spare cash to save. When those children become adults themselves, they have no idea what to do with extra money. It’s much easier to get rid of it by spending. This restores them to a familiar situation in which they feel more comfortable – one of having no money.

Of course, we can emulate positive habits from our parents, too. As a child, I learned the importance of saving and long-term planning. This has benefitted me enormously, as financial stability provides us with choices and eliminates many distracting worries. Less helpfully, I also learned that spending money on myself was unwarranted extravagance. Although squirrelling away some of your income is an excellent habit, it’s important to also enjoy life and pursue fulfilment. Financial wellbeing means experiencing a healthy relationship with money. Hoarding is no healthier than compulsive spending.

Here are some questions to ask yourself

  • What are your key money memories and how do they influence you now?
  • What did your parent(s) tell you about money? Has this led to any self-limiting beliefs?
  • What do you tell yourself about your relationship with money now? How would it feel to let go of those messages?

Once you’re aware of those influential messages, you can start challenging them. You might be familiar with this principle of Cognitive Behaviour Therapy (CBT): our thoughts cause feelings that trigger actions. If you think you shouldn’t have money, you might feel ashamed, and then act by getting rid of it. Equally, the thought that money is scarce could make you feel anxious. The potential result is stashing away every spare penny and avoiding opportunities.

We like to think of ourselves as independent grownups, but our tiny selves are lurking within and influencing our thoughts, feelings, and actions. It’s impossible to have an unemotional relationship with money. However, if we understand those emotions better, we can use them to our advantage and achieve lasting positive change.

Image © Ranta Images –

The Importance of Paying Yourself First

Paying yourself first might seem like an odd idea. Let me explain. What usually happens each month is that we pay all the bills, with most of our salary disappearing before we’ve even seen it. If there’s anything left, that’s what we put towards goals such as paying off credit card debt (beyond the minimum payment), building a pension, or saving for a house deposit. Paying yourself first means prioritising those goals, then paying for everything else. That’s not to suggest that you avoid bills, rather that you reduce your outgoings so they’re covered by what’s left. This could involve drastic shifts, such as downsizing, or smaller changes like finding a cheaper electricity provider.

Here are three tips to help you establish the habit of paying yourself first.

1. Start small

Photo of snowballAs I mentioned in a previous post, transformation is usually unrealistic and unsustainable. It’s much better to be gentle on yourself by starting small. This helps build confidence and provides evidence of success. Depending on your circumstances, you might initially seek to save £25 each month. Over 10 years, this modest habit would give you a pot worth £3,000.1 Just imagine what you could achieve with a larger amount. You can think of this as a gift to your future self: an opportunity to go on a trip, take some unpaid leave from work, or buy a fancy guitar. It doesn’t matter if you don’t know what you’d spend it on – Future You will know.

If you’re paying down debt, repaying even slightly above the minimum payment will liberate you much sooner. For instance, if you have a card balance of £10,000, your minimum payment is likely to be £500 (5% of the total) in the first month, which slowly reduces as you pay it off (so, £478.64 in the second month, etc).2 It would actually take 10 years for your debt to disappear. Keep paying a fixed amount of £500, however, and you’ll be free in just over 18 months. Take a look at the Snowball Calculator to see what a difference overpayment could make to you.

2. Reduce spending

Now you know what a difference a small amount of money can make, it’s time to identify some potential savings. Don’t be too draconian, as you’re looking to establish a sustainable habit. Start with something that you won’t notice much, such as cancelling the subscription to a magazine you never get around to reading. Most of us can easily save a few quid each month by swapping energy or mobile phone providers. Yes, it’s a bit of hassle, but the rewards are significant over time. Since ditching my phone contract a couple of years ago and getting a cheap SIM card, I’ve saved over £600.

3. Increase your income

Admittedly, this one is harder. Few of us will get a pay rise in the current climate, but it’s never been easier to maintain a side hustle – a freelance activity that generates some additional income. I did this back in the nineties when I had a large mortgage and a very leaky roof. Once my house was watertight, I carried on with my freelance business and invested the income each month. That stash meant I could finally go to university at the age of 32. Money isn’t necessarily about building wealth, it’s there to give you options and opportunities.

If you do get a pay rise this year, consider saving that extra money, instead of letting it get absorbed in your general spending. Set up a direct debit before you get used to having it.


The only way to reach our financial goals is to establish saving as a priority. It’s like the task that languishes at the bottom of the to-do list – unless it rises to the top at some point, it’s always gets pushed to tomorrow. Take small steps today and you’ll make giant leaps in the future.

Image © Jakub Krechowicz –

  1. ignoring inflation and interest []
  2. Based on an APR of 10% []

Finding your motivation to establish good habits

“But it’s soooo boring,” is a common response when I mention the importance of maintaining a budget. Often, we avoid a good habit because it’s not very enjoyable. But it’s not always about having fun. If I go to the gym with the intention of enjoying myself, I fail nearly every time. However, if my objective is to improve my strength and fitness, I succeed every time. Occasionally I enjoy myself – if, for example, a poseur walks into a mirror – but mostly it’s a slog. But, that (almost) daily effort will hopefully keep me vertical and mobile for another four or five decades.

Recording your expenses each day is much less fun than watching Orange is the New Black, but it’s completely unrivalled if your aim is to feel more in control of your finances and meet goals such as saving for retirement or a new house. So, being more mindful of your intentions can help when motivation is on the wane. Here are a couple of suggestions for keeping going.

Create a motivational password

You probably type your password a least a couple of times each day. Changing it to a motivational sentence is likely to be more secure, and it’ll also remind you of your priorities every few hours. You could try:

  • Save£25perW3ek!
  • Get0ffF@cebo0k
  • Pay0ffCr3ditC@ard

As you’ll see, you can replace letters with numbers or symbols to improve security. This might stop you buying stuff on Amazon or fiddling about on Facebook when you could be finding a new client.

Keep a note in your purse or wallet

In the excitement of discovering a bargain, we quickly reach for our credit cards. If, however, this involves first removing a message emblazoned with a financial goal, we’re likely to think twice. This is a firm reminder of those real priorities, such as “I want to retire at 60,” “I really need a new car,” “I don’t want to starve when I’m old,” etc.  Of course, this doesn’t generally work with online purchases, as we tend to store our details. Disable one-click ordering and remove your card information. You can still buy that item, but it forces you to confront the note in your wallet each time.


Perhaps you’ll never actually enjoy budgeting, but I reckon you’ll relish the results. Whatever you need to do, keep reminding yourself why.

Image © Holmessu –