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Understanding Your Client's Money Behaviours!

Significant emotional events don’t just affect us emotionally, they can dictate how we make financial decisions and drive our behaviours. Not only that, money is a subject that elicits strong emotional responses in all of us; feelings that shape our actions for better or worse.

Let’s look at one of the most powerful influences on human behaviour: the brain!

The brain is responsible for our thoughts, feelings, intelligence, the nervous system, motor skills, breathing, heartbeat and sleep. It facilitates almost every aspect of our lives.

Let’s break down what happens within our brain and the biochemistry around our thoughts and behaviours.

Our experiences are made up of a series of sensory functions: things we see, hear, smell, touch and taste. Every day, we collect these experiences – and over time, we collate them into learned behaviours (such as ‘I won’t touch the stove because I know it’s hot’). As this happens, neural pathways within our brain are created and conditioned (our ‘go-to’ ways of thinking and acting) and these produce the biochemicals that facilitate our emotional responses to our experiences.

Every time we have an experience, our frontal lobe (the ‘control panel’ of our brain) sends neuron signals across the brain. These electric signals tend to follow established neutral pathways – the ones we’ve created over time. They then hit our pituitary and pineal glands, secreting specific biological chemicals – such as serotonin, melatonin and dopamine. These trigger our emotions, feelings and memories.

With our thoughts so closely connected to our emotions and moods, our brain produces electrical activity in the form of waves, sent into our outer world. (Alpha brainwaves, being our conscious mind, and beta brainwaves our subconscious.) Our unique brainwave patterns virtually connect us wirelessly to the unified (quantum) field, science links this to consciousness. Our brainwave patterns and daily experiences of the world are inseparable, they essentially form our reality.

“What you think, you become. What you vibrate, you attract. What you dream, you can create.”


What does neuroscience have to do with money?

As we’ve established, money is a stressful subject for most people. Many have experienced a lifetime of sensory experiences that link money to stress, survival, short-term thinking, lack or trauma. As a result, negative sentiments such as 'it's hard to save money' or 'there's never enough money' become automatic – and we program ourselves to have a negative relationship with money, without even realising it.

Fortunately, we can reprogram our brains to align to the type of behaviour that will enable positive money relationships and support in attaining our life goals.

To change these innate biochemical brain patterns, we must begin by understanding and recognising them. From there, we need to train our thoughts to focus on the exact opposite scenario.

For instance, if we believe there’s ‘never enough money’, our thoughts need to focus on an 'abundance of money'. If we live in a survival state where it’s all about ‘getting by in the now’, we need to re-frame our thinking to focus on a ‘long-term state of security’.

It may sound like dreaming, but it’s supported by science: the more we train our thoughts in a positive way, the more easily we can break free from our conditioned negativity.

Simply put, if you mentally embrace the future with clear positive thoughts, intentions and feelings, it is more likely to become your reality.

"Thoughts are the vocabulary of the brain, feelings are the vocabulary of the body."

Joe Dispenza


A deeper dive into the behavioural science that influences money and life goals

Human values, beliefs and behaviour can powerfully influence our relationship and thoughts toward money, in ways we’re often not aware of.

Let's explore the four main influences of money relationships.

Our Money Values

Money values stem from a persons ideals and beliefs around money. For example: a person may value money by perceiving that it provides them with - freedom, status or power.

Values impact our financial decisions as much as they impact our other life decisions. Research has found that our values influence everything we say and do (Coletto, Lucchese, & Orlando, 2018; Teo, 2018) and in the financial realm, our values also influence our consumption patterns (Halim & Dinaroe, 2019). 

Our money values are not dissimilar from our general life values, and the implications of the values on our behaviour is similarly widespread. For example: someone who values ‘family’ may not only spend a lot of time on the phone to close family members, however, they may spend their holidays visiting relatives, at great expense. The implications of values are thus linked with financial outcomes. 

Our values comprise of contextual beliefs and cognitive strategies (McClendon, 2019). Our contextual beliefs include; how we feel when we talk about our beliefs and cognitive strategies are what directly influence our behaviour (McClendon, 2019).

Values are generally related to intrinsic, extrinsic, and interpersonal realms (Liu, 2017). Perspectives of money can be that money brings - protection, influence, or security. The process of establishing our values into financial behaviours include: noticing; thinking; emoting; sorting; valuing; choosing; and finally behaving (McClendon, 2019).  

Boyd identified 11 core money values, these include: (Boyd et al., 2015): 

  • Certainty 

  • Freedom 

  • Faith 

  • Empathy 

  • Family 

  • Growth 

  • Work 

  • Decision making 

  • Honesty 

  • Openness 

  • Knowledge 

Money values are part of our decision making framework. They lie at the core of connecting advisers with their individual clients, and in helping them to prioritise their life goals. 


Our Money Beliefs

Money beliefs are a persons beliefs that are adopted from their environment or past experiences. For example: a belief that "money destroys lives" may have been ingrained from a childhood traumatic experience with money.

Often our beliefs about money impact the way we relate to and think about money. We tend to carry these money beliefs in our adult life, often learned in our childhood. (Furnham, 1996; Kirkcaldy & Furnham, 1993)

Unfortunately, money beliefs may not be helpful, especially if parental role modelling demonstrated an unhealthy relationship with money, which can leave a long lasting imprint around the role money plays in a persons life.

Klontz and Klontz (2009) hypothesised that money beliefs in individuals are: 

  • developed in childhood,

  • often passed down from generation to generation in family systems,

  • typically unconscious,

  • contextually bound and;

  • a factor that drives much of one’s financial behaviours. 

There's interesting research that shows that beliefs about one’s self-worth positively correlates with financial satisfaction and positive perceptions of one’s past, present, and future financial situation, and in contrast negatively correlate with overspending and financial worry (Hira & Mugenda, 1999).

The Klontz -MSI research on money beliefs provides an update to Yamauchi and Templer’s (1982) Money Attitude Scale and Furnham’s (1984) Money Beliefs and Behaviours Scale. 

The Klontz-Money Script Inventory (Klontz-MSI) assessed potential problematic attitudes and beliefs of individuals that may interfere with them achieving their financial goals. 

The analysis revealed four distinct money beliefs:

  • money avoidance,

  • money worship,

  • money status and;

  • money vigilance.

By understanding and exploring an individuals beliefs and ideologies around money, advisers can assist their clients to identify their belief challenges and encourage them to develop new positive beliefs.


Our Money Behaviours

Money behaviours are the way a person acts and responds toward money. For example: a set of behaviours such as; self-control, motivation, optimism and present bias can often influence ones relationship with money.

By understanding the different behaviours that impact our connection with money, we can develop new positive behaviours that help us to achieve our desired outcomes - our goals and life aspirations.

Below we explore the types of common behaviours that influence money relationships, often acting as barriers that hinder people from achieving their life goals.


People can generally be described as either moving toward reward, or away from pain. These underlying differences impact our entire values, attitudes, and decision-making systems. 

Money motivation systems have been described by Belk and Wallendorf (1990) and Yamauchi and Templer (1982) and include associations with: 

  • Value 

  • Utility 

  • Wealth 

  • Meaning 

  • Emotion 

Toward Reward 

Those motivated by reward or gain have been found by researchers to have higher performance (McClendon, 2019). The approach to communicating with those who are motivated by gain or reward is to offer encouragement and rewards (McClendon, 2019). When a client is identified as being motivated by reward, positive goal-achievement language can ensure the client is engaged in the communication.

People who have been exposed to seeing money in a positive light are more likely to seek out more positive feelings and experiences. They will attract people with similar belief systems and values around money, and they will work ‘towards’ achieving outcomes and goals, as long as it provides them with positive emotions and its pleasurable. This ‘toward response’ means they’ll prefer to set goals related to the things they desire and want to have in their lives.

Away from Pain 

While those who are motivated by gain have higher performance, those who are motivated to avoid pain often illustrate lower performance. This is intuitive given that the avoidance of pain is somewhat finite, measurable, definable, and achievable. On the other hand, seeking reward and recognition can include goal-creep and continual striving for success. When a client is identified as being motivated to avoid pain, negative pain-avoidance language can engage the client in the approach and the communication.

People who have had exposure to a negative environment when it comes to money, they will tend to dislike or even avoid thinking or talking about money.  They will tend to be driven to take action ‘away’ from pain and negative emotions, and this ‘away response’ means they tend to set goals linked to the things they’re afraid of happening (or losing).The good news? Everyone is capable of setting goals, whether they’re motivated ‘toward’ or ‘away’. It’s just a matter of firstly understanding their motivation system.



Self-control is a persons ability to regulate their emotions, thoughts, and behaviour in the face of cause and effect. Self-control is a cognitive process that is necessary for regulating one's behaviour in order to achieve specific goals.

People with high self-control are more likely to stick to a plan and achieve their goals. They can maintain regular savings and have control over their spending. This means there is less concern around them harming their financial outcomes.In contrast, those with low self-control have less likelihood of following a plan and achieving their goals. Although they may work hard for their money, it seems to disappear just as quickly. This type of client may benefit greatly from mentoring.



Optimism is a persons capacity to positively influence their life outcomes, like having the ability to see opportunity within adversity. People who are overly optimistic tend to be linked to being high risk takers, entrepreneurs, they work less, have less saving and likely to retire earlier. These people are not overly concerned with fees, costs, or interest rates, they tend to be able to see the long-term benefit of upfront expenses for long-term financial gain.

In contrast, people who have low optimism have a more realistic and a negative expectation of their future world. They tend to be sceptical of future success, unlikely to take risks, they're very hard working, good at saving towards a goal, however, worry they won't have enough and they're more likely to retire later. 

Optimism plays into a persons fixed or growth mindset. Having a fixed mindset, as the name implies, increases the limitations you have in your life. Optimists believe the glass is half full, whilst pessimists believe it’s empty. A leading Stanford University psychologist Dr Carol Dweck, found that those with fixed mindsets believe their intellect is static, whilst those with growth mindsets strongly affirm their intellect evolves. 


Present bias (time horizon)

Time horizon is closely linked with the propensity to spend versus save, because of prioritisation of the present (ie. strong present-bias) means the future (and savings) receives less attention.

People are either past, present, or future focussed (McClendon, 2019) and they are generally aware of their time preference.

Research has shown that mental time horizon correlates with more than just savings behaviour; it has the same affect on investing and debt management. People who think ahead are more likely to keep track of their personal finances and spending, and promptly pay their bills – they’re even more likely to carry low to zero balances on their credit cards. 

A person who thinks short-term may prefer to receive twenty dollars today over receiving twenty five dollars tomorrow (instant gratification). Whereas a person that thinks long-term may prefer to hold out for twenty five dollars tomorrow.Getting people to think long-term has many empirical benefits.

Our brains are hard-wired to give more weight to immediate needs, and to discount the future. The shorter a person’s mental time horizon, the more they will find long-term saving to be a challenging and painful task. The below graph shows the correlation between those with higher retirement savings, had long-term mental thinking.

Retirement savings by income and mental time horizon

With this in mind, it’s always easiest to start goals based advice by looking at the client’s short-term goals (within the next 1-2 years) and extend outward toward long-term goals (5-20 years). We must always anchor this with their retirement age and life expectancy. The further ahead a person thinks, the better their financial behaviour, and the less they’ll worry about their future.

Financial knowledge

Financial knowledge, or financial intelligence, has the potential to impact consumers financial decision making at all stages of the financial life cycle. This is because financial intelligence is not simply financial literacy, it is also the ability to monitor one’s own money motivations, money behaviours, and money cognition (Tang, 2016; Tang et al., 2018).  

These are skills which are far more difficult to acquire than simple financial literacy and even financial capability. This means that money intelligence includes the ability to reflect on one’s own motivations regarding money. In an ideal world we would be able to ask people for their motivations regarding money, but in reality this research indicates that some people will not even be aware of their own money motivations, and hence will incorrectly answer.

In addition, this research highlights that financial intelligence involves monitoring one’s own financial behaviours. We know from research that people seek financial advice because monitoring one’s own financial behaviours is demanding. Furthermore, this research emphasises the importance of thinking about money, and about the way consumers think about money.

It is our thoughts about our thoughts that can play a critical role in framing the way we approach money.

Money challenges

The way we consider money challenges depends on the frame we use to consider our financial situation, which is built up over our life from experiences and context.

Framing influences the perception of money challenges (Zamfir, 2019). In our everyday financial lives, when events are framed in terms of ‘blame, helplessness, or me’, counterproductive perceptions of money can be developed (Zamfir, 2019). 

Given that so much of financial success relies on strong decision making, these counterproductive perceptions of money can be particularly difficult. 

These challenges can be overcome by putting events into a different frame, and this occurs through attitude change and clarity (Zamfir, 2019). The re-framing of challenges can help consumers to overcome counterproductive mindsets. Indeed, authors have found that digital technology can be leveraged to help people reduce how they perceive their financial challenges (Lewis & Perry, 2019). 

Learning Style - Visual, auditory & kinaesthetic

There are a number of approaches to learning style, including the visual, auditory & kinesthetic approach and the big-picture vs detail approach (McClendon, 2019). 

Some people learn by first understanding the big-picture, and after they understand that, learning about the details.

On the other hand, some people learn about details first, how they fit together, and finally the big picture (McClendon, 2019). Understanding a clients learning style has powerful implications for all communication, both in digital, written, and face to face form.  

In order to get people to ‘understand’ financial advice, we have to deliver it in a way that connects to people’s preferred leaning styles.

As outlined in Howard Gardner’s Multiple Intelligences Theory, people are capable of learning in a range of ways: via words & language (linguistic), via numbers (logical-mathematical), through sound (auditory) or through images, diagrams or videos (visual).

Interestingly, if we break down peoples learning styles we find that:

  • 65% of people are visual learners, learning through visual aids - infographics, pictures, maps and diagrams

  • 30% of people are auditory learners, learning through listening, speaking, language and discussion

  • 5% are kinaesthetic learners, they need to act in a 'hands on' way


Empowering clients is key

People who feel empowered in their financial lives experience more joy, peace, satisfaction, and pride in their financial lives. Those who felt dis-empowered (helpless, hopeless or stuck) were, overall, less happy.

Not surprising, really – but what is interesting is that goals-based advice actually provides a bridge to take clients from one state to another.

By enlightening people through financial literacy & education, and helping them understand and visualise what’s possible, we can empower them to play an active role in their futures. The very act of setting an achievable goal is empowering – even more so is when you give that same person a way of tracking their progress.

Rather than feeling like a victim at the mercy of their financial circumstances, they see the impacts of their actions and decisions – inspiring them to step up, take responsibility, and actually relish the improvements this brings about.

In the graph below, the blue line represented people who agreed with the statement: “I create my own financial destiny.” The orange line represents people who said instead that they: “Have very little power” in their financial lives.

Emotional well-being by income and empowerment

This illustrates that 'empowerment' is key. By transforming advice into a co-creation experience, where clients feel they are part of a journey, educated and informed along the way, they can develop a more confident relationship with money as a result.

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