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.

Embarking on and sticking to your investment journey requires a solid understanding of financial principles and an appreciation for the emotional roller coaster that comes with it. Asset allocation, a crucial component of investing, is about striking the right balance between risk and reward to achieve your financial goals.

As you consider different allocations, it’s essential to recognise the emotional implications of your choices, allowing you to make informed decisions that align with your unique risk tolerance and personal well-being.

Financial planning has traditionally focussed on the numbers, often neglecting the emotional aspects of investing. This leaves many of us unprepared for the roller coaster ride that can come with aggressive allocations, such as the 70/30 (eg 70% stocks and 30% bonds) approach. Understanding the emotional side of asset allocation can help us make more informed decisions and avoid painful financial setbacks.

The 70/30 portfolio promises higher returns but also comes with the risk of significant losses. Investors who can accept the occasional tumble down an 18-step staircase (metaphorically speaking) may find this allocation suitable. On the other hand, those who prefer stability and insulation from worst-case scenarios might choose a more conservative 30/70 (eg 30% stocks and 70% bonds) allocation.

Regardless of strategy or numbers, we need to work together to comprehend the emotional impact of your chosen allocation before committing to it. Investors who cannot handle significant market swings may need to adjust their expectations and lifestyle accordingly. It’s essential to remember that there’s no guarantee that a 70/30 portfolio will outperform a 30/70 allocation – it all depends on timing and market conditions.

A critical issue in setting expectations is the misuse of the term “average.” When we’re told that the S&P 500 has averaged 11% for the past 20 years, we may assume this means we will see consistent returns close to that figure. In reality, actual returns deviate significantly from the average, leading to either excitement or panic and poor decision-making.

Emphasising the concept of standard deviation, or the market’s roller coaster-like fluctuations, can help us understand the inherent risks of investing.

When planning and working with our investments, we need to focus more on the emotional context of asset allocation. We can make better-informed, real-world choices by being emotionally forthcoming about the potential ups and downs of different asset allocations – enabling us to invest with heart and mind.

When framed in emotional terms rather than mathematical ones, people may choose more conservative allocations that better suit their risk tolerance and emotional well-being. After all, reaching financial goals is much more enjoyable when the journey isn’t filled with anxiety and stress!

Discussing finances can be a daunting task, especially when emotions run high. It’s important to remember that there’s a human element behind every financial decision – our dreams, fears, and values.

Nancy Kline is an American-born author, business consultant, and personal development coach. She is best known for her Time to Think methodology, which emphasises the importance of creating a thinking environment that promotes independent thinking, deep reflection, and transformative change.

By incorporating Nancy Kline’s Time to Think methodology, we can bring empathy and understanding into our money conversations, ultimately leading to healthier financial relationships and better decisions.

A crucial aspect of Kline’s methodology fosters open communication and respect. By nurturing this environment in our financial discussions, we’re able to improve the conversation and acknowledging the human side of money.

Here are some fundamental elements of a thinking environment and how they can improve financial discussions:

1 – Attention: Give the person speaking your full, undivided attention. This means listening without interrupting, judging, or trying to problem-solve immediately. By doing so, you’re allowing the speaker to express their thoughts and feelings openly, which can lead to greater understanding and better decision-making.

2 – Equality: Treat everyone in the conversation equally, regardless of their financial knowledge or experience. This fosters an environment of mutual respect and reduces the risk of misunderstanding or miscommunication.

3 – Encouragement: Encourage each person to express their thoughts and ideas without fear of judgment. This can lead to more innovative and creative solutions for financial challenges.

4 – Information: Gather accurate and complete information before making any financial decisions. This ensures that everyone is working with the same facts and can make well-informed choices.

By giving full, undivided attention to the person speaking, we can better comprehend their financial concerns, goals, and aspirations. This deep understanding allows us to co-create financial plans and strategies more effectively to meet everyone’s specific needs and objectives. This is exceptionally powerful from family financial planning through to creating budgets for volunteer organisations, businesses and corporates.

Active listening fosters trust in financial relationships, whether with a partner, family member, or colleagues, which is crucial for open communication and collaboration. When people feel heard and valued, they are more likely to participate actively in financial planning discussions, generating diverse ideas and perspectives.

Attentive listening can also minimise the risk of misunderstandings or miscommunications in financial conversations, ensuring everyone is on the same page and helping to prevent costly errors. Allowing everyone to express their thoughts and feelings openly leads to more effective problem-solving. When people feel safe and supported, they are more likely to be honest about their challenges and work together to find creative solutions.

By creating a healthy time to think, we can create an environment that acknowledges and validates the emotions involved, alleviating stress and making the planning process more enjoyable and fulfilling.

In lifestyle financial planning, striking the right balance between empathy and codependency is essential to building healthy relationships while maintaining personal well-being. A recent tweet by Dr Nicole LePera (@Theholisticpsyc) highlighted the differences between empathy and codependency.

Empathy means understanding a person’s feelings and being able to put ourselves in their shoes. In the context of financial planning, empathy allows us to be aware of and attuned to the emotions and perspectives of others. By actively listening and offering support from a place of compassion or curiosity, we can create authentic, safe relationships where we can all feel seen, heard, and understood. This emotional connection is invaluable in helping us make important financial decisions that align with our values and life goals.

On the other hand, codependency involves chronic neglect of ourselves and the tendency to go into “rescuer” or “fixer” mode when someone shares their emotions. In financial planning, codependency can manifest as giving unsolicited advice, agreeing to help friends and family at the cost of our own emotional well-being, or trying to rescue them from their own actions. It’s crucial to remember that our role is not to fix others’ issues, but to love, support and empower them to make informed decisions.

When we’re in fixer mode, we may feel uncomfortable or anxious with our own emotions and try to change someone else’s situation instead of understanding their feelings. This lack of boundaries can lead to feelings of burnout, resentment, or being taken for granted.

To avoid codependency in lifestyle financial planning, we must practice “holding space” for others without interjecting our own feelings. If we notice the impulse to give advice or “fix” the situation, we should remind ourselves that we are only responsible for our own decisions, not everyone else’s.

To strike the right balance between empathy and codependency, it’s crucial to maintain clear boundaries and an awareness of our roles in the lives of others. If we are asked for help or support and are in a space to provide that assistance, we can offer our expertise and resources. However, if we aren’t asked for help, we must release our role of trying to rescue others and focus on empowering them to make their own decisions.

By cultivating empathy, we can create safe and authentic relationships with others while maintaining clear boundaries and avoiding the pitfalls of codependency. This approach allows us to guide ourselves and others towards financial decisions that align with values and goals, ultimately leading to a more fulfilling life for all of us.

Our mindset is crucial to our financial success. Dealing with our money can quickly become an obsessive task; either focusing solely on the amount we’re lacking or missing, or becoming obsessed with saving and storing up, we can sometimes do more harm than good. This is why mindset plays a significant role in how we approach financial planning.

Whilst a miss is as good as a mile, at the same time, too much of a good thing can be a bad thing.

To achieve balance in our financial lives, adopting a mindset that “just enough” is actually a very healthy space in which to be, can be helpful. This means recognising that while saving and investing for the future is essential, enjoying life in the present is also crucial. With this mindset, we can create a financial plan that prioritises our long-term goals while still allowing us to live comfortably in the present.

“Just enough”, however, is not a number; it’s actually a lifestyle choice. Yes, it’s sometimes represented by a number, but it will constantly change with our lives and situations. And, it is explored through a process of working with some of the following ideas:

• Identify your long-term financial goals: Determine what you want to achieve in the future, such as buying a home, starting a family, or retiring comfortably. This will help you understand how much you need to save and invest to reach these goals.
• Assess your current financial situation: Take stock of your income, expenses, debts, and assets to understand where you stand. This will give you an idea of how much you need to save, invest or spend to maintain a comfortable lifestyle.
• Prioritise your values and interests: Consider what aspects of your life are most important and what brings you the most joy. Allocating your resources towards these areas will contribute to your happiness and satisfaction.

Once you have defined your “just enough,” it’s time to implement this mindset into your financial plan. This involves balancing saving, investing, and spending that aligns with your long-term goals and values.

• Saving: While having an emergency fund and saving for specific goals is essential, remember that it’s also important to enjoy life now. Instead of obsessing over every penny saved, focus on building healthy savings habits and balancing saving and spending.
• Investing: As you work towards your long-term financial goals, don’t hesitate to take calculated risks with your investments. A well-diversified portfolio can help you reach your objectives without putting all of your eggs in one basket.
• Spending: Adopting a “just enough” mindset doesn’t mean you can’t enjoy life now. Allocate a portion of your budget to discretionary spending, allowing you to engage in activities and experiences that bring you joy.

Achieving balance in financial planning means understanding that having “just enough” can be as good as having plenty saved up. By adopting a mindset of “just enough” and focusing on the areas of our lives that truly matter, we can create a financial plan to live a fulfilling and enjoyable life while still working towards our long-term goals.

Personal financial planning has become critical in shaping our lives and determining our future. However, many of us need help to make the right decisions and achieve our financial goals. The key to overcoming these challenges lies in harnessing and leveraging our strengths to create a life of our own design.

By understanding and embracing our strengths, we can replace apathy with passion and ambivalence with engagement, ultimately shaping a more authentic and fulfilling financial future.

The journey to financial wellness begins with recognising that we all possess unique strengths that can help us navigate the complex world of personal finance. Our strengths can be anything from our ability to save diligently to our aptitude for understanding investment strategies. However, knowing our strengths is only half the battle. The real magic happens when we make a conscious decision to utilise these strengths in our financial planning endeavours.

As F. Scott Fitzgerald once said, “It’s never too late to be whoever you want to be. I hope you live a life you’re proud of, and if you find you’re not, I hope you have the strength to start over again.” This sentiment holds true for our financial lives as well. No matter where you are on your financial journey, there’s always room for growth and improvement. By engaging our strengths, we can create a life that aligns with our values, energises our behaviour, and moves us closer to our financial goals.

What is holding you back from maximising your strengths in your financial planning? Many of us avoid using our strengths because we fear fully committing and failing. However, it is essential to understand that failure is a natural learning process. Instead of fearing failure, we should view it as an opportunity for growth and self-improvement.

By using our strengths in our financial planning, we create a more authentic and empowered relationship with our money. Even if we don’t achieve our desired outcome, engaging our strengths can lead to personal growth and greater fulfilment. As a result, it’s crucial to shift our mindset and focus on the potential benefits of embracing our strengths, rather than the fear of failure.

The road to financial success is paved with all of our choices. By acknowledging the existence of these moments of choice and being prepared to step forward and embrace our strengths, we can create a more authentic and fulfilling financial future.

Let’s chat if you need help engaging your strengths in your financial planning. By asking the right questions, we can navigate a helpful journey of reflection and self-discovery, enabling you to make more informed and authentic financial decisions.