BLOG: How your money mindset affects your relationships and financial stability

BLOG: How your money mindset affects your relationships and financial stability

Our money mindset is our attitude and beliefs about money – our belief systems about everything from earning and spending, to savings and debt. But how do our money mindsets impact our relationships with loved ones and our own financial stability?

Where did you first learn about managing money? Was it from your parents or siblings? Was it at school?

We all grow up with money habits that we’ve developed by observation – this becomes our money mindset.

Unfortunately, there are very few courses in schools, or when people are young, about financial planning or personal financial management. The consequences of that are that we look to our parents and other people that we respect, and we follow their mindset path.

We each have internal biases that cloud our decisions and our judgments. These money mindsets and biases that we learned from others and also picked up during our lives and are tainted by our own personal experiences.

This is not ideal when you’re making financial decisions. In fact, it can downright compromise your ability to plan objectively.

But a financial planner is trained to remove all of those biases from the conversation, and the decision-making process. A financial planner also removes all the emotion from the money decisions.

Financial decisions during life’s transitions

In the average life there are between 30 and 60 transitions – events whereby money is coming to you or going away from you – it’s important to have a solid plan in place.

But what money mindset are you bringing to your financial planning?

As life-centered financial planners, we base decisions on facts as best as we possibly can, on research as best we possibly can, and on experience.

Between Foundation Stone Financial Planning Ltd’s David Lunn and Dervla Moloney, there are nearly 60 years of financial advice and experience there, which was gained by talking to lots of people and living through lots of life experiences, both of their own, and their clients.

When we look into financial plans, we look at those transitions in people’s lives.

What are the changes that are going to come up that are going to make a difference in their lives?

These can be everything from the birth of a child to the purchase of a home, to buying a holiday home, putting a child through college or coming out of paid employment.

Unfortunately, death, divorce – all of the difficult things – are also transitions in people’s lives.

And these are periods where there’s uncertainty – events and experiences that you’re not used of.

It takes time to become accustomed to the change, and it takes time to move through to the new normal.

But the financial planner is there to help you through all of these things, to align your objectives and to help you see that making an emotional decision to do something suddenly may not be in your best interests.

Ultimately, you’re going to make the decision yourself, but we can give you information that you may not otherwise have which will allow you to make good decisions.

More about transitions

What is a transition? To quote financial planning author Mitch Anthony, “Money goes into motion when life goes into transition”. Let’s take the birth of the child, as an example. That child comes into your life, and suddenly you now have the additional expense of raising that child between birth and when they go out and become productive members in society. All of that expense is money going away from you.

If you inherit – that’s another transition. Unfortunately, losing a loved one is something that is difficult to cope with but at that moment you may also have money coming back to you, and suddenly you have the responsibility of that money.
What are you going to do with it? How are you going to protect it? What is the purpose of it? Why was it given to you? And how are you going to make the best use of that opportunity, and not squander it or fritter it away, or even hoard it and not get any benefit from it at all?

These are all conversations that the financial planner, especially a life-focused financial planner, will have with you. Remember, money goes into motion when life goes into transition, and this could happen 30 to 60 times in an average life.

Behavioural biases

There are a number of different behavioural biases worth looking at. One example is overconfidence, such as what we saw during the property boom in Ireland. Everyone thought it would last forever – but financial planners know that everything is cyclical.

People get carried away – whether with stocks or property – and they continue to think it’s going to last forever. Making those decisions on their own can be dangerous. Herd mentality is another bias, and it is linked to overconfidence. People think that because everyone else is doing something, they should in that same vein.

Regret is another behavioural bias. People can feel they’ve missed out on something else in the past, and so they get carried away with their emotions over time.

Planning your finances as a couple

When we’re looking at a financial plan with a couple, we would always assess them independently, at first.

Each person answers completely different questionnaires. They need to be honest with themselves and with each other, in terms of answering the questions that are applicable to them, specifically.

Because often we meet couples who are very different in terms of their past experience with money, with family scenarios and where they’ve learned how to manage money. Their money mindsets can differ greatly.

And some of them might have more of a bias towards savings, whereas others might have more bias towards spending. One member of the couple might be very happy to have a lot of debt or a big mortgage, the other might be very anti-that and would prefer to have cash or on deposit and would be very anxious if they had high mortgage levels.

We build financial plans that take both people and their money mindsets into account, and we help them plan for the future together, understanding their differences.

It definitely helps in the relationship, from a financial perspective, as they jointly prioritise their goals.

Some individuals have a preference towards having a big house and a big mortgage, whereas others prefer saving and would be more comfortable with a smaller house without big debt.

If there are children, couples may be looking to save for their education. Maybe there is a business, they might need to put money into that business. If they want to fund their retirement through pensions, that needs to happen too.

A financial plan can ultimately lead to a much happier scenario, and this is how we help people get a return on life. With a jointly agreed financial plan in hand, they both feel that they want to achieve together.

Our job is to review their situation for changes – and there are always changes because everything changes over time. We make adjustments along the way for the changes that arise as their lives evolve.

Removing conflict through common financial goals

In relationships, if a couple has a common goal and they’re both heading towards that common goal, it removes a lot of the conflict.
Every individual and family has very different sets of goals, desires and objectives. It’s important that families and couples have tailor-made plans.
For this reason, every plan we do is bespoke. We are objective financial planners who will help you plan your whole life’s transitions. We put you at the centre of all our conversations.

If you’d like to chat with us about a financial plan for you and your family, drop us a line on

You can also find us on social media and tune in to our Navigating Money podcast on the second Thursday of every month.


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