Category: Blog

Automatic thought patterns are pervasive and impactful, influencing our moods, behaviours, and even our self-concept. In our everyday lives, we sometimes struggle to recognise their presence in our decision-making, especially when it comes to financial choices.

These automatic thoughts – images, words, or other mental activities – that pop into our minds in response to certain triggers can appear mundane or insignificant. Yet, they are anything but!

So, what is automatic thinking? 

Stemming from the beliefs we hold about ourselves and the world, these surface-level, non-volitional cognitions emerge reflexively based on our current beliefs. While we can’t control them directly, we can challenge the assumptions that lead to them, giving us more control over these thoughts.

The concept of automatic thinking found its roots in Aaron Beck’s research into negative automatic thoughts’ impact on depression development. Beck was a psychiatrist and psychoanalyst, often referred to as the father of cognitive therapy.

Researchers soon found that positive automatic thoughts were equally crucial to understanding overall mental health, leading to extensive studies on both. Research has indicated significant consequences of negative automatic thoughts. For instance, in people living with HIV/AIDS, negative automatic thoughts are associated with depressive symptoms. Among athletes, negative automatic thoughts can lead to burnout, and in university students, they result in more mental health symptoms and decreased self-esteem.

However, to comprehend fully how automatic thoughts impact us, we need to understand our cognitive bias and the construction of our self-concept. Self-concept refers to how we perceive ourselves – our past experiences, abilities, future prospects, and all other aspects of self. A negative self-concept can lead to an unending cycle of negative thoughts, causing us to exhibit biases towards negativity.

This brings us to the concept of Beck’s cognitive triad: someone who is depressed will automatically have a negative view of themselves, their experiences, and their future. These negative views lead to other symptoms of depression, leading to a negative view of oneself, creating a negative cycle of negativity.

We can interrupt and change this cycle by understanding how it begins and how it continues. Take, for instance, negative automatic thoughts such as “I’m no good,” “I can’t get started,” or “I’m a failure.” If we continue telling ourselves these things (thinking about them silently), we will continue the negative cycle.

On the flip side, positive automatic thoughts could be “I feel fine,” “I can accomplish anything,” or “I’m proud of my accomplishments.” If we start to think or speak these out loud intentionally, we can restructure how we deal with automatic thoughts and how they shape our habits. Mindfulness practices can also help counteract automatic negative thinking by letting us release negative thoughts or directing our attention elsewhere.

When it comes to financial decisions, these automatic thought patterns play a substantial role. For instance, a person with a negative self-concept might be more prone to financial decisions reinforcing their negative self-view, such as repeatedly entering into bad investments or refraining from saving. On the other hand, those with a positive self-concept might make more prudent financial decisions, reflecting their positive outlook.

Understanding automatic thought patterns is crucial, not just for mental health but also for healthy financial behaviours. By identifying and challenging these automatic thoughts, we can unravel the complex web of beliefs and biases that shape our financial habits, paving the way for healthier and more empowering financial decisions.

Money, it is said, makes the world go around. We use it daily, exchange it for goods and services, save it for the future, worry about it, celebrate it, and yet often, we are reluctant to delve into our personal histories with it. 

Our earliest memories of money can reveal much about our present-day financial beliefs and behaviours. Understanding these memories is essential to retelling your money story and creating a healthier relationship with your finances.

Imagine taking a journey back in time to your earliest recollections involving money. These might include receiving an allowance for chores, opening your first bank account, or witnessing discussions about money between your parents or caregivers. How did these experiences make you feel? What did they teach you about the value of money, the importance of saving, and the consequences of spending?

In most cases, the messages we received about money in childhood were indirect, absorbed through observation rather than explicit teaching. This is how our subconscious money beliefs begin to form. For instance, if you saw your parents struggling with debt, you might have subconsciously internalised the notion that money is a source of stress and anxiety. Alternatively, if you were rewarded with money for achievements, you might equate money with success and self-worth.

A critical part of retelling your money story involves reflecting on these early experiences and uncovering the hidden narratives that underlie your financial behaviours. You might find, for example, that you’re a chronic saver because of childhood fears of not having enough, or maybe you’re a compulsive spender, seeking the temporary thrill that buying something new provides, a thrill you first experienced when you spent your pocket money as a child.

Once you’ve identified these narratives, the next step is to challenge and reframe them. This doesn’t mean forgetting or negating your past experiences. Instead, it’s about acknowledging them, understanding their impact, and then consciously adopting new, healthier beliefs about money. 

Remember, your past doesn’t have to dictate your future.

As part of this journey, you might also consider sharing your discoveries with those closest to you. Money conversations are often considered taboo but can be incredibly healing and liberating. By sharing your money story, you open up the opportunity for empathy, understanding, and support from others who might be going through a similar process.

Our relationship with money is complex and deeply personal. However, by exploring our earliest memories of money and understanding the impact on our financial behaviours, we can start to rewrite our money stories. This is a continuous journey of self-discovery and growth, one that requires patience, courage, and compassion. But the reward – a healthier, more empowering relationship with money – is well worth the effort. Remember, the goal is not to attain perfection, but rather to strive for progress and authenticity in your financial life.

As we journey through life, we often hear phrases like “seeing is believing”. But when it comes to our financial health and well-being, there’s a subtle yet profound difference between merely seeing and truly recognising. It’s akin to looking at a tree and appreciating its beauty, compared to recognising its species, understanding its growth patterns, and knowing its ecological value. 

This difference plays a pivotal role in financial planning. ‘Seeing’ could be equated with knowing our financial status – our incomes, expenses, debts, and savings. However, ‘recognising’ is a deeper, more insightful process. It involves understanding spending habits, recognising our financial goals and needs, identifying investment opportunities, and comprehending how our financial behaviours shape our life story. It’s a form of financial self-awareness that moves beyond numbers, fostering a holistic approach that values people and relationships over products and markets.

But financial recognition is more than just a standalone process. It’s a journey, much like the transition from data to information to knowledge to wisdom. ‘Data’ is like seeing: it’s the raw facts and figures of our financial lives – our earnings, expenditures, savings, and investments. When we process this data into meaningful chunks, we step into the realm of ‘information’. We may begin to see patterns, such as overspending in certain areas or how much we typically save each month. ‘Knowledge’ is gained when we understand and interpret this information in context. We might recognise that our spending patterns are linked to emotional triggers, or our saving habits are influenced by our long-term goals. 

‘Wisdom’, the final destination, is when we apply this knowledge to make informed, sensible decisions – choosing to adjust our spending habits or align our savings plan with our life aspirations.

Consider Jane (a fictional client). Jane saw her bank statements every month but needed to recognise her increasing reliance on credit for lifestyle expenses. Together, we are able to turn this data into information, tracing the pattern of overspending. Understanding her emotional spending triggers elevated this information to knowledge. Eventually, Jane could apply this knowledge to break her credit cycle and make wiser financial decisions, improving her overall financial health. Her journey beautifully illustrates the power of recognition in bolstering financial health.

Developing financial recognition involves more than just number crunching. It’s about nurturing a mindset that embraces financial self-awareness and lifelong learning. Regular financial check-ins help you spot trends and patterns. Educating yourself about personal finance principles can enhance your understanding and interpretation. Working together, we can guide you in understanding your financial story, helping transform data into wisdom.

Seeing is just the beginning. Recognition – true understanding and application of what we see – is what we find to be most beneficial, empowering and life-changing. When we recognise, we invite wisdom into our financial journey, enabling a healthier and more fulfilling relationship with our finances.

Independent thinking is critical in lifestyle financial planning, and here’s why. Each person has unique financial needs, aspirations, and circumstances. When you think independently, you can assess your personal situation and determine what matters most to you. This helps you set goals that genuinely reflect your values and priorities, making your financial plan more meaningful and motivating.

Also, the financial landscape is constantly changing. New investment opportunities, tax laws, and market conditions emerge all the time. As an independent thinker, you’re better equipped to adapt your financial plan in response to these changes. By staying informed and thinking critically, you can make well-informed decisions that align with your long-term goals, even in a dynamic financial environment.

Another reason independent thinking is essential in lifestyle financial planning is that it helps you avoid common pitfalls, like getting swept up in trends or making decisions based on emotions. When you think independently, you’re more likely to be objective and rational when evaluating different financial options. This way, you can make sound decisions in your best interest, rather than being influenced by external pressures or short-term emotions.

Nancy Kline’s More Time to Think highlights the importance of independent thinking in personal and professional growth. Developing the ability to think independently can significantly impact your financial success.

Here are some ways to cultivate independent thinking in your financial life:

Educate Yourself: Take the time to learn about financial concepts, products, and strategies. By doing so, you’ll be better equipped to make informed decisions and avoid relying solely on the advice of others.

Question Assumptions: Don’t accept financial advice or conventional wisdom without questioning its validity. Investigate the reasoning behind recommendations and consider whether they align with your financial goals and values.

Reflect on Your Financial Values: Understanding your financial values and priorities can help you make decisions that align with your long-term goals. Take the time to think about what matters most to you and how your financial choices can support those values.

Embrace Diverse Perspectives: Seek out different opinions and viewpoints to gain a broader understanding of financial topics. This can help you uncover new ideas and avoid groupthink or confirmation bias.

Independent thinking is vital when working with a financial adviser. While financial advisers can provide valuable insights and guidance, it’s important to remember that you are the ultimate decision-maker when it comes to your financial plan. By thinking independently and asking questions, you can ensure that the advice you receive aligns with your unique goals and values.

In essence, independent thinking in lifestyle financial planning empowers you to create a financial plan that profoundly reflects your needs, adapt to changes, avoid common pitfalls, and make informed decisions in collaboration with your financial adviser. This leads to a more secure and fulfilling life.

Money is more than just a tool for transactions; it’s an emotional force intertwined with our identities, values, and sense of self-worth. Our money story is a tapestry of beliefs and experiences that shape our financial behaviours and attitudes.

By exploring different elements of our money story, we can better understand our emotional connection to finances and work towards a healthier relationship with money.

Financial Role Models: Our money story is greatly influenced by the role models we had growing up. This includes not just our parents, but also other relatives, friends, and influential figures in our lives. Did they demonstrate healthy money management habits or struggle with debt and overspending? Observing the financial behaviours of those around us often subconsciously informs our own financial choices.

Money and Self-Worth: Our self-worth can be closely tied to our financial situation. We may feel more valuable when we have a certain amount of money, achieve specific financial goals, or maintain a particular lifestyle. Examining how our self-esteem is connected to our finances can help us identify and challenge unhealthy beliefs that may be holding us back.

Financial Decision-Making: The way we make financial decisions is a critical component of our money story. Do we tend to be impulsive, conservative, or methodical when it comes to spending, saving, and investing? Identifying our decision-making patterns can help us better understand our emotions surrounding money and take steps to adopt healthier habits.

Cultural and Societal Influences: Our money story is also shaped by the cultural and societal context we grew up in. Different cultures and communities have unique values, beliefs, and attitudes about money, which can influence our financial behaviours. Reflecting on these cultural and societal factors can help us gain a deeper understanding of our money story and identify areas where we may want to make changes.

Financial Goals and Aspirations: Our aspirations and dreams play a significant role in our money story. What do we want to achieve financially, and why? Are these goals aligned with our values, or are they influenced by societal pressures and expectations? Assessing our financial goals and aspirations can help us create a more authentic and emotionally satisfying money story.

To retell and reshape your money story, exploring these different elements and spot the emotional undercurrents that drive your financial behaviours is essential. Begin by reflecting on your financial history, the messages you received about money, and the emotions that arise when you think about your finances. Journaling can be an effective way to document your thoughts and uncover hidden beliefs and patterns.

As you gain insight into your money story, you can start to rewrite it by challenging unhelpful beliefs, developing healthier financial habits, and aligning your financial goals with your values. This process of self-discovery and growth can lead to a more fulfilling and emotionally healthy relationship with money, ultimately contributing to your overall financial well-being.