What influences your approach to money?

Published on: August 8, 2019

Written by:

Adam Faulkner

If you don’t know where your money goes each month, you’re not alone. We often see clients who don’t have the full picture on how they spend their money – or why they do it that way. However, when it comes to your financial wellbeing, understanding your spending habits is critical. 

Your habits are largely driven by your behaviour towards money, so it’s important to understand what influences this.


They say, ‘history repeats itself’ and this is often true when it comes to our financial behaviours. For many of us, these are learnt during childhood. The way our caregivers managed their finances back then heavily influences how we manage our own today.  For example, if you grew up in a household where money was never an issue, you might take that approach to your own finances – even when it is an issue. Conversely, those raised with limited financial resources, will tend to take a more frugal approach themselves.  

Social network

It’s not only your family that has an impact; your friends and peers will also influence how you manage money. The old ‘keeping up with the Jones’attitude still exists; you see your friends doing well and of course you want to emulate that. 

In the social media age, this can be amplified. We often see a heavily edited or exaggerated version of other people’s lives, and this can create a sense of competition to have the latest gadgets, luxurious holidays or high-end designer brands, regardless of our financial means.  

Values and ethics

Your values drive decision-making in every aspect of life, including how you spend your money. For example, if you really value long-term security, you’ll probably put more money away than if you value social status, where you’ll likely spend more money achieving that goal. 

Although the one might sound like a better option, it’s not necessarily a game of good vs bad. It’s about being clear on what you want out of life today and tomorrow – whatever that is – and then setting the right goals that will allow you to achieve it. 

More and more, we are seeing ethics play a role in spending, and while this is may be a great thing for the planet, there is no denying it has an impact on our wallets.  Ethical food, for example, such as organic or vegan diets do typically cost more to sustain, but for many, the net benefits outweigh the costs.  

Lifestyle choices

Your everyday life choices will affect your finances. For example, if you spend a lot of time socialising, you’ll probably spend more money. Ditto if you like having a punt; while I’d love to tell you that there are plenty of winners who have gambled their way to financial freedom, it’s more likely the opposite. 

Your finances are also impacted by your life stage. Couples with two wages often find it easier as many basic costs are shared and at least reduced, if not halved. Singles, on the other hand, pay similar living costs, such as mortgage/rent, food and utilities, all from one wage. 

Career decisions

While we’d all like to do what we love for a living, the reality is that there’s often probably trade-off:  Following a dream or earning a stable wage. The ‘passion vs. commercial outcome’ is a common dilemma. It might sound simplistic, but focusing on a career with higher wage opportunities will open up more financial avenues today and potentially the opportunity to follow your passions tomorrow.

With a higher wage gained from a practical career, you could use your savings to support causes that you care about or engage with your passion as a hobby – even retiring or cutting down working hours earlier to spend time focusing on it. 

Changing your approach

With such strong influences, it can be easy to think you can’t change your approach. The reality is that you can.  

The first step is to be clear about your goals and think about how these influences are impacting them. You can then start to take stock of the negative influences that are getting in the way of your financial freedom. 

When it comes to making changes, it’s a good idea to start small, as it can have a big impact over time. For example, it may be as simple as forgoing one social event per week and banking the savings. 

It’s not a case of going without, it’s about an ‘everything in moderation’ approach. It’s the approach we take at Life Money Co, helping our clients balance their current lifestyle with their future goals to achieve the best outcome. 

Interested in knowing more? Click here to see our approach to building a stronger financial future. 

General Advice Disclaimer

Information contained within this blog is of a general nature only. Individuals should not act upon any such information without prior consultation with a qualified financial adviser to ensure that any action meets their personal financial needs, situation and objectives.  No responsibility is accepted for those persons acting on information contained herein and persons do so at their own risk. 

Responsibility is disclaimed for any inaccuracies, errors or omissions. Particular investments are neither invited nor recommended. All expressions of opinion are published on the basis that they are not to be regarded as expressing the official opinion of any other person or entity unless expressly stated.

Life Money Co Pty Ltd is a Corporate Authorised Representative No.1276114 of MyPlanner Professional Services Pty Ltd ABN 51 159 696 830 (AFSL 425542).