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Plan Well, Retire Well

Saving and investing your money

The Why Behind Our Money Decisions


Put two people in the same situation where they need to manage money and they're likely to react to the situation differently. Our past experiences, values, and many other things all influence our reactions. We know this, but we may not realize how much these influences affect our daily behavior.

Syble Solomon, author of several books on this topic including "Money Habitudes™ A Guide for Professionals Working with Money Related Issues," says "Your money habitudes determine how confidently and competently you manage your money. They are the result of the many messages you received and experiences you've had as you were growing up." She goes on to explain that money habitudes are a combination of our attitudes (our subconscious thoughts and feelings) and our habits (what we do without thinking).

Have you ever spent money or made a financial decision and then later thought, "Why did I do that?" For example, a few years back I noticed that when I was stressed (my attitude) and went grocery shopping, I bought lots of groceries (my habit). In fact, I found it hard to put it all away in my cupboards! Once I was able to raise my subconscious feelings and behavior to a conscious level, I was able to remind myself to stick to my grocery list (and not buy double of everything) especially when I was stressed.

Here's an example from Solomon related to debt, "If your attitude is that all debt is bad, your habit may be that you will not seek out a loan to start a business, buy a house, or college." In contrast, "if your attitude is that everything will work out in the end, your habit may be to borrow money or use credit even if there is a high risk that you won't be able to pay it back."

Money habitudes are not necessarily bad or good. However, when they affect our decisions without us being aware of them, they may be holding us back from reaching our goals. This time of year is a good time to think about what influences how we use money.

Solomon defines different money habitudes. For example, some people's dominant money habitude may be Security (money is used to feel safe and in control) while someone else may relate more to the habitude Status (money is used to present a positive image). Advantages of the Status habitude are enjoying gift giving as well as enjoying spending money on you. Challenges with this habitude could include having trouble accepting gifts and/or feeling expected to share your money all the time.

All habitudes have advantages and challenges; the trick is to know what your challenges are. If the challenges of the Status habitude sound familiar, deciding how much you are going to spend on a gift before you go shopping and then sticking with it, may help you.

What about the challenges of the Security habitude? While someone with this habitude may plan well for the future, they may also find it challenging to enjoy anything that requires spending money. And, they may tend to buy cheap products to save money even though the products don't last. One idea for someone who feels they use this habitude too much is to plan for fun and set aside a reasonable amount of money to spend being with family or friends and for gifts.

Another habitude is Giving: people use money to feel good by helping others. While there are definite advantages to this habitude, without balance challenges may include expecting unrealistic gratitude from others when you share as well as having a difficult time taking care of yourself. To help find balance with the Giving habitude it may be useful to make a list of your long-term goals and be sure to save for these future needs before giving money to others.

Most people are a combination of habitudes. How we categorize these habitudes is not as important as recognizing the people or situations that trigger a behavior that we may regret later. Once we can identify the behavior and the attitude, then we can take steps to change it. Don't let your unconscious money habitudes drive your financial decisions.


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Thanks for a great article on Money Habitudes. The newly revised Money Habitudes just became available. They are the same format. Statements were revised to reflect feedback on validity from research at Utah State University and readability is now consistently 5th grade or lower. Syble www.moneyhabitudes.com
by Syble Solomon on Friday 1/11/2013