Understanding subconscious attitudes towards money may help to explain spending habits

Our spending habits, the money we have and the money we think we’ll need in retirement are constantly being discussed, re-appraised and re-adjusted.

Financial advisers are trained to educate us in the way we manage money. They guide us into strategies such as the best asset allocation for our risk tolerance. They advise us to choose a good balance in our portfolios by investing in a mix of sectors such as securities, real estate and precious metals.

We are encouraged to budget carefully so that we can pay ourselves first, before we pay others. And sometimes they even tell us it’s wise and healthy to treat ourselves to expensive purchases and holidays every now and then.

All this advice is mostly concerned with income, spending, investment, projections and time frames. In other words, it is mainly about numbers and statistics.

It’s fairly certain that a financial adviser given two individuals with closely matching ages, incomes and spending habits will present very similar financial plans. Even the risk tolerance of the individuals is generally deemed to be a function of age - the younger the higher.

How is a financial adviser to know an individual’s psychological attitude towards money? It’s very difficult because most of us don’t even consciously know ourselves.

How do we begin to understand our unique relationship with money? No doubt, like other character traits, attitudes towards money and spending habits were shaped when we were very young.

I remember going to buy sweets (candy) when I was about five or six years old in post war England. I can still feel the three-penny bit coin clutched in my hand.

Candy store

I also had the ration stamp which was needed to make the purchase. Rationing on all food items continued for several years after the Second World War.

I think the fact that I needed not only money but a 'permit to buy' left me with a kind of conditional attitude about money. The availability of an item seemed as important as the quality.

I never really made the connection between higher priced, quality goods and the fact that those goods could last longer and may turn out to be cheaper in the long run. Simply being able to purchase them seemed the important thing.

I don’t think I’m cheap, but I always fall for the lower priced ‘volume’ item as the best choice. I mentioned this to my wife and she admitted she finds this spending habit of mine exasperating.


I'm always buying lawn sprinklers that seem to pack in after one or two seasons. Next time I am determined to buy one that looks like it will last a lot longer and I will pay the price.


How do we delve into our subconscious and try to figure out why we interact with money the way do?

An interesting tool that is surprisingly intuitive and thought provoking is Money Habitudes.

It’s a pack of cards that can be used by individuals, couples or groups. It suggests that money isn't the problem - it's money habits and attitudes related to money that is. It claims to reveal the real issues that make people argue, act irrationally or keep them from reaching their financial goals.

I discovered from the cards that one of my traits was ‘Buying based on price when it isn’t what you actually want, won’t really meet your needs or won’t hold up over time.’  I felt this described me accurately and it made me think seriously about it.

This tool could be very useful for couples; often their fighting is about money. Understanding each others deep seated relationship with money and spending habits may help them reach good solutions.

For singles, it may help create some peace of mind through greater understanding. Click here for the company that has developed them:- Money Habitudes

For those who prefer to get down to some deeper level of thought about the subject here are two very well written and entertaining books:-

  • Arlene Modica Matthews. If I think about money so much, why can't I figure it out? : Understanding and over-coming your money complex.
  • A perennial favorite among financial advisers and for general reading:- George S. Clason. The Richest Man in Babylon: The success secrets of the ancients - The most inspiring book on wealth ever written.

For a brief review of these books go to Retirement Planning Tools and scroll down to 'Reading Suggestions'.

Just making a start on trying to understand your subconscious attitude can improve your relationship with money. It may also improve your relationship with family and friends.

And if you have a financial adviser, always divulge everything even if you’re uncomfortable discussing some difficult debt you are carrying. Your adviser must know everything about you in order to assist you properly.

Adding a deeper understanding to the numbers is a useful way to begin.