I’ve spent a fair amount of my adult life making mistakes with money…even though I worked in Financial Service for most of my career.

For the past few years, I’ve been on a quest to get it together with money and it feels like it’s been a LOT harder than it should have been.

And I don’t think I’m alone here…I’ve worked with a lot of women in my money coaching business and spoken to many, many more and this same theme runs through pretty much every conversation I have with people about money.

The real problem is that it goes deeper than knowing the basics of money management like budgeting and saving.

The answer touches on something much more fundamental: our core beliefs and how they shape our financial behaviours.

First, let's talk about core beliefs. These are the deeply ingrained thoughts and values that have been built up over time, often from childhood. Think of them as the operating system of your financial mindset. They run in the background, influencing every decision you make about money.

For instance, if you grew up in a household where money was always tight and conversations about finances were filled with stress and anxiety, you might have developed the core belief that “money is a source of stress.” Even as an adult, this belief can lead to automatic thoughts like “I'll never have enough” or “I'm not good with money.”

These automatic thoughts are like reflexes. They happen without you even realising it and can trigger negative financial behaviours. 

Maybe you find yourself avoiding looking at your bank account, because seeing the balance induces anxiety. Or you impulsively spend money to temporarily feel better, even though it leads to regret later (both behaviours I’ve been known to play out).

Let’s break down how these core beliefs and automatic thoughts can play out in everyday scenarios:

Scenario 1: Payday Splurge

You just got paid, and the first thing you do is treat yourself to something nice—dinner at an expensive restaurant or a shopping spree. Before you know it, a large chunk of your pay is gone, and you’re scrambling to cover your bills for the rest of the month.

Core Belief: “I deserve to enjoy my money right away.”

Automatic Thought: “I work hard, so I deserve to spend freely when I get paid.”

Negative Behaviour: Splurging impulsively, leading to financial instability.

Scenario 2: Savings Sabotage

You’ve set up a savings plan and you’re determined to stick to it. But every time an unexpected expense comes up—a car repair, a friend's birthday party, or even just a sale—you dip into your savings. Over time, your savings account barely grows, and you feel like you’re back to square one.

Core Belief: “There’s always something that needs my money more than my savings.”

Automatic Thought: “I’ll save more next month, but I need to handle this expense now.”

Negative Behaviour: Consistently prioritising short-term wants over long-term savings. (Again, guilty!)

Scenario 3: Debt Denial

You know you have credit card debt, but thinking about it makes you feel overwhelmed. So, you ignore it, only making minimum payments or sometimes missing payments altogether. The debt grows, and the interest piles up, making it even more daunting to tackle.

Core Belief: “Debt is too overwhelming to deal with.”

Automatic Thought: “I’ll think about it later; I can’t handle it right now.”

Negative Behaviour: Avoiding dealing with debt, leading to higher balances and more stress.

Breaking the Cycle

So, how can we break the cycle? Grab a piece of paper (journal if you keep one) and a pen and spend a few minutes on the actions below.

1. Identifying Core Beliefs: The first step is to identify what your core beliefs are. Ask yourself what messages about money you heard growing up. Were you taught that money is scarce? That it's a source of conflict? Or maybe that it's a measure of your self-worth? Understanding these beliefs can help you see the roots of your financial behaviours.
2. Challenging Automatic Thoughts: Once you've identified your core beliefs, it's time to challenge the automatic thoughts they produce. If you catch yourself thinking “I’ll never be able to save enough,” ask yourself if that's really true. What evidence do you have for or against this thought? Replacing negative automatic thoughts with more realistic and positive ones can make a big difference.
3. Changing Behaviours: This is the hardest part but also the most rewarding. When you understand and challenge your core beliefs and automatic thoughts, you can start to change your behaviours. Instead of avoiding your bank account, set a small, achievable goal to check it once a week. Or instead of impulse buying to feel better, you could explore other ways to manage stress, like exercise or talking to a friend.

Breaking the cycle of financial mistakes isn’t about willpower or trying harder. It’s about understanding the underlying beliefs and thoughts that drive your actions. By getting to the root of these issues, you can create lasting change and develop healthier financial habits.

Next time you catch yourself about to make the same money mistake, take a few moments and think about what core belief might be at play here? What automatic thought is driving this behaviour? And most importantly, how can you challenge and change it?

Each time you succeed, note it and reflect on it. Speak to yourself positively about it. For example, “I’m so proud of myself for not touching my savings this month”.

Understanding your financial psychology can be a powerful tool in creating a more stable and positive relationship with money - it’s been a game changer for me. Don’t get me wrong - I’m a long way from perfect, and it’s a long game but every month I’m taking positive steps forward and you can too.

xo

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