Money Psychology: How Your Subconscious Mind Might Be Sabotaging Your Financial Decisions
Money is about so much more than just the numbers. The way we save (or don’t), splurge, invest and make financial decisions is influenced by our deeper wiring, emotions, experiences and how safe our nervous system feels around the topic of money.
Have you ever felt a wave of panic after making a big purchase? Or unexplainable guilt after an impulse buy, even when you could actually afford it? These experiences highlight an important reality: money decisions are rarely purely logical. Our emotions (and subconscious mind) are often playing a significant role in how we think about and interact with money.
Even when we technically know what we “should” do, we can still find ourselves avoiding looking at our bank balance, giving in to the little voice that says ‘treat yourself’, or repeating patterns that don’t actually get us any closer to our goals.
While financial conversations and advice often focus purely on numbers, strategies and outcomes, the psychology behind our money behaviour is often what determines whether we take action, stay consistent and make decisions that support our future or continue patterns that don’t serve us. To put it simply, as humans a lot of our decisions are actually made from our deeper programming and our emotional brain, rather than the logical rational one, especially where money is concerned.
How can therapy help when it comes to money?
Humans are wired to protect ourselves (fun fact - our caveman brain hasn’t changed all that much). Many of our psychological responses evolved to help us respond quickly to threats. Which is useful when we are in actual danger, but these same responses can show up around money and influence our decisions, emotions and behaviours.
For example, we tend to experience losses as more painful and to a greater extent than the positive feelings or reward of gaining an equivalent amount (a phenomena called loss aversion). We also naturally prioritise what feels rewarding now over what benefits us later (present bias). These patterns can make uncertainty feel uncomfortable and influence how we save, spend and invest.
But money patterns are not only about biases. Our relationship with money is also shaped by our deeper beliefs about money that often develop from our early life experiences, family environment and the meaning we attach to money. For example:
“Money is always stressful”
“I need to be perfect before I start”
“Having more money makes me selfish/a bad person”
“I can’t trust myself with money”
These kind of subconscious beliefs can influence our choices without us noticing sometimes keeping us stuck in patterns that feel familiar or safe, even when they are not helping us move towards our goals.
Biases and beliefs are just two of the many psychological factors that shape our relationship with money. Our personality, values, tolerance for uncertainty, relationships and social comparison can all influence how we earn, spend, save and invest. Exploring these influences can help us better understand why we’ve been stuck in certain patterns around money and start to actually make change.
What changes when you improve your psychology around money?
Understanding the psychology behind finances can help you:
Recognise patterns and beliefs influencing your decisions
Reduce anxiety, shame or overwhelm around money
Make decisions with more confidence and intention
Build financial habits that align with your values
Small changes can have a big impact over time. Just like money itself, consistent actions compound. Whether it’s challenging unhelpful beliefs, reducing avoidance, or building confidence around decision-making, meaningful change often comes from small actions repeated consistently over time.
Real-world psychological hurdles around money
Money struggles often aren’t just about a lack of knowledge; they are often about what money brings up emotionally (linked to that deeper wiring). Common challenges include:
Avoiding investing because uncertainty feels overwhelming
Waiting for the “perfect” time to start and getting stuck in procrastination
Making emotional decisions during market changes
Earning a high income but still feeling anxious about not having enough/it going away
Making financial choices to please or impress others rather than yourself
Avoiding retirement planning because it brings up fears about the future
Couples struggling to align when they have different beliefs about spending, saving or risk
Feeling shame about debt and avoiding support
Feeling overwhelmed when managing major financial changes such as inheritance, separation or rebuilding after a difficult period
It’s often assumed financial wellbeing is simply about earning more or making better decisions. Financial satisfaction is not always about having more. Often, it comes from feeling that the way we earn, spend, save and invest reflects our values, priorities and goals. Understanding and working on your own deeper wiring around money can help you finally move towards that alignment between what you say you want and what you’re working towards day to day.
If you’re keen to learn more about how therapy might be able to support healing your relationship with money why not book a free intro call with Justine?
References
Lal, S., Nguyen, T. X. T., Bawalle, A. A., Khan, M. S. R., & Kadoya, Y. (2024). Unraveling investor behavior: The role of hyperbolic discounting in panic selling behavior on the global COVID-19 financial crisis. Behavioral Sciences, 14(9), 795.
Marjanovic, Z., Greenglass, E., Fiksenbaum, L., & Bell, C. (2013). Psychometric evaluation of the Financial Threat Scale. Journal of Economic Psychology, 36, 1–10.
O’Donoghue, T., & Rabin, M. (1999). Doing it now or later. American Economic Review, 89(1), 103–124.
Thaler, R. H. (2000). From homo economicus to homo sapien. The Journal of Economic Perspectives, 14(1), 133-141.
Tversky, A., & Kahneman, D. (1991). Loss aversion in riskless choice: A reference-dependent model. The Quarterly Journal of Economics, 106(4), 1039–1061.
