Where your money habits come from

Welcome to How Do They Afford That, the podcast that peeks into the financial lives of everyday Australians. I'm Michael Thompson. I'm an author and the co-host of the podcast Fear and Greed Business News. As always, I'm with Canna Campbell, financial planner and founder of Sugarmoma TV, the Financial Literacy Platform on YouTube and Instagram, threads, TikTok and more. Hello, Canna. Hello. Canna. Today, sound like I'm starting to whinge at you, doesn't it? Great. Get off to a great start. Today's episode is another one that came out of a previous episode when we were talking about money habits, those kind of little things that we do with our money and where those habits have come from because they don't just appear out of nowhere. They typically have some kind of starting point, some origin story. Indeed. I wanted to take a closer look today at how we develop our feelings and our habits about money, whether they all come, say, for instance, from your parents or your family, your home environment when you are a child. If they are formed in the household, how then do we make sure that the examples that we're setting and the habits that we are forming in our kids, for instance, are good ones as well? And can you just end up creating this cycle of good or bad habits that goes through potentially through generations? If you are okay with this topic. I am. It's kind of quite timely because I just finished reading Happy Money by Ken Honda. Oh, yes. Which I couldn't remember the author's name when I first spoke about this idea or this concept. It's an interesting concept, isn't it? Do you think, how early do you think our attitudes about money and our habits start to form? It is in childhood, wouldn't it be? Yes, even before we can count. Really? Really. So we are absorbing consciously and subconsciously all the time, the energy, the emotions around money and the stress, secrecy, the scarcity, but then also the generosity, the freedom, the choice and the time. And from what I have read, it suggests that around about age seven, most of us already have formed a lot of our financial beliefs and they're just starting to make and take shape. Seven. Well, that according to the studies that I've read, yeah. Oh, wow. Do you think then, in that case, if it's by seven, do most of our financial behaviours come from watching our parents, you would assume? Yes, but not just your parents. So also people of impact. So you may have grown up with a wealthy uncle or a neighbour that was squanderous and constantly spending money. People stood out to you. And it's actually got a term, it's called financial socialisation, where other people's financial behaviours are imprinted in you. And this is often, we've learnt this from obviously observing them, repetition, overhearing conversations or perhaps a lack of conversations where things are just not spoken about and the choice of language where people have fears and they've imposed their fears onto others. Habits, like particularly around maybe gambling or spending or saving and obviously assumptions. And obviously this can then cause money blocks for people, which are a real thing. And luckily, it's a real thing that can actually get a lot of help out there. So it's not necessarily what they've heard and seen, but also what they're seeing people do and haven't do that really does help form these beliefs. Then I started thinking about this episode. It made me go back and think about kind of what I picked up when I was a kid and some of those money habits and probably the main thing when I think about it now was an observation of the importance of hard work. Like it was kind of like a work ethic that I really very much picked up from my parents. And as a result of that, an appreciation of the value of money, that you have to work really hard to earn money in life. And you can't get lucky. Yes, indeed. You're not worthy of luck. If you get it, you're not worthy of that because you got it through luck. Yeah, it's about this idea of you earn, you earn what you have been able to kind of accumulate. And that because you've had to work hard for it, then you need to make smart decisions about your money, which I think is a great way to kind of set someone up for life because it's about the value of money and the input that you actually need to do in order to create that. And from there, you can kind of go, OK, well, how do I take that and how do I make smart money decisions about investing and all of those kinds of things? But what are some of these other money habits then that people do absorb in childhood? I suppose it is about what you mentioned, like with the squanderless uncle and the thing about the risk of just spending all your money and blowing it all. So the common ones, I think everyone can relate to hearing, we can't afford that and that obviously creates an element of fear or that scarcity mindset. The classic one, your parents have had, you've got to work really hard for every single dollar, which then also can sometimes create burnout or that kind of adrenaline, like side hustle mindset. The classic one, money doesn't grow on trees, which these days is money doesn't come out of the magical wall and money doesn't come out of that special little plastic card every time we tap or even our phones as we knock things. Because if I try and tell my kids I left my wallet at home, they say, it's fine, just grab your phone. Just use your phone. Yeah, it's a really hard thing to try and teach kids about the value of money when you don't actually see money anymore. It is. So the other thing, when I think about this, we're living at one of the most expensive times in history with the cost of living crisis. So what are we saying to our children? What are we imprinting into our own children about, I'm guilty of saying things like this to myself, we can't afford that right now or that's too expensive because things simply are, we don't mean to, it's not intentional, but we're also got to be aware of what we're saying to our children so that we give them the best level of awareness and self-worth and self-control to be able to have healthy habits and not create similar money blocks that maybe have been imprinted on us. And these things will show up like avoiding financial decisions, overspending or over-saving, being so tight with money because you're so scared of money and then obviously having a huge guilt around money, which is an interesting one, because I think a lot of people have been told like you are that you've got to work hard to earn money. So what happens? How do you feel when money comes to you easily? Some people can feel really uncomfortable with that. No, I think almost I then appreciate how lucky I am in that respect, which I think it does strike me as quite a positive thing. It means that I appreciate the fact that, hey, I did not have to do perhaps as much as I would otherwise have had to do in order to earn that sum of money. Therefore, this is a good thing. This is a bonus. This is a benefit. Let's do something wise with it, which makes me sound very, very clever. It does. But you know what? You're lucky to have that mindset then, because some people would be really ashamed or embarrassed to have actually gotten lucky and had a blessing, had a hand up from a parrot or won the lottery. If I won Lotto, there would be zero shame attached to that. I've worked hard to enter that every single week. So it's not easy to remember to put your entry in every week. Please tell me you don't write lottery tickets every week. No, only when it's over $10 million. You know, I recently discovered one of my own money messages that was imprinted as a childhood. I was going to ask you whether you had noted any from your own. I did. And it was really confronting. And I discovered this by reading this book and also doing this other program, which I recently completed around mindset. And I actually realized I have a, the way my, I guess, negative money message comes out is actually an element of that attacks self-worth, but actually it almost like a form of over-investing, which comes from, you know, a fear and a insecurity around stability and harmony within relationships. When I discovered it, it was really confronting. And I was, but also at the same time, it was fascinating and insightful. So, you know, it's definitely worth exploring these, you know, I guess, these definitions, these messages, these things that have been imprinted in you as you go down your financial journey because you will definitely release a lot of things in your life. Well, actually, that leads me into something that I would be interested in. Can you unlearn then or kind of rewire money habits that, that perhaps aren't serving you well as an adult? Say you've carried over some insecurity around money from childhood. How then can you change that as an adult? Because that would be a hard habit to break. Well, I'm an example. I'm working on this exact discovery myself and yes, the first step is obviously awareness. I've now discovered it and I'm now able to sort of break it down, understand where it comes from, but also dissect it and pick apart and criticize it and go, well, that doesn't make sense. And that's actually factually incorrect. And why do you want to think like that? Does that serve you in a positive way? So I've then been able to reframe it and, you know, challenge it and then flick the switch of it on it and she turned it into a good thing that serves me in a positive way. And what, you know, people suggest is using like affirmations and journaling and obviously fighting for education and getting help, but you definitely can, I think, build new neural pathways. It takes time. It takes obviously patience and an element of sort of, I guess, compassion, and you do need to constantly be on top of it because, you know, just when you think you've cleared a money block or in a negative habit that was imprinted, there's a new one that's lying just beneath the surface waiting for you. But yes, I definitely do and I think it's been very liberating for me speaking from personal experience to discover what was behind all of this. Can I ask them what are the signs as an adult, perhaps, that you might have inherited a negative money mindset from childhood? Is it that kind of avoiding money decisions? Is it building up debt and not knowing how to keep on top of it? Is it not being able to ever get yourself ahead that you were just living from week to week to week to week? It's all of those. You know, it's believing that I'm never going to be good with money, feeling guilty for spending money on yourself. You know, I know someone very close that just feels physically sick and shameful if they go and buy something really nice for themselves. You know, also, you know, there's a lot around the resistance, you know, resisting learning about money, resisting getting started, resisting actually going and getting advice. There's also, you know, an element which I think a lot of us are guilty of, and there's that self-sabotage when you're just starting to make progress with your finances and you just go, you know, you pay it off one credit card and then you go have a financial blowout. So it shows up in lots of different ways. And you know, to ask your question, yeah, there are lots of different signs, but it also depends on what is the actual incorrect message or habit or attitude that's created it. And there's more that kind of looks back and then we'll look to the future. How do you start to understand what your kind of money story is? You mentioned the journaling process and all of those kind of bits and pieces that you're doing to help work through some of those things that you have carried over from your youth, right? But how do you actually start to understand what your challenges, your own issues might be? So the first thing is obviously reflecting and you've got to do that in a safe space, you know, with no distractions and be able to open up and go deep because it's, you know, we're going back depending on how old you are and depending on what your childhood was like, you know, it could be quite a confronting or a true trigger for some people. And then breaking down like, where did I hear that from? You know, how did people around me handle certain financial situations or certain challenges? And sit with the emotions that come up for you with that and look at what you took away from it. And then understanding that you actually have the ability to change it. And this is why there are so many, you know, great books out there that are designed to help you. And you know, it's a $30 book or there's even, I actually even know a financial planner, she's actually a retired financial planner who focuses purely on people's money box. And I will happily pass on her details because she's, she's absolutely brilliant. But the thing with any of these things and not a negative thing necessarily, you can take the goodness from anything negative that happened to you and turn it into a positive thing. So when I discovered my block, I've actually, I think come out of that a better person and a more secure person in taking the goodness out of it and the responsibility out of that particular block. But also understanding about what else is needed to give me what I was essentially trying to crave from that money block in the first place. If that kind of makes sense without making it a counselling session for Canada. It does. It does. And I'm happy to do a counselling session, should you need it? But I'm completely unqualified. I think you'd be most uncomfortable. Oh, wouldn't that be extraordinary? God, don't be. You like, oh, Canada, stop crying. It's uncomfortable. I don't know what to do. Okay, we're going to take a break. When we come back, I want to then talk about the next generation, right? So this is kind of, we've covered what we take from our own childhood. How do we then make sure that perhaps the messages that we are passing on to our own kids, if you have them and to the next generation or to the people around us, it doesn't have to be your kids, that those money messages are good ones. We'll do that in a sec. Canada, we are talking all about money habits today, where they come from, how you develop them, and then how you pass on good money habits into the future to other generations, your kids, perhaps young people around you as well. Let's start with parents, right? What's the best way for parents to talk to their kids about money, especially when things perhaps are tight, and it may not even be talking directly to their children about money. It's about the conversations perhaps that they have between themselves that kids might overhear. Oh, definitely. It's funny, Tom and I will make sure, we might bitch and moan about how things expensive things are, but we're also, when we're trying to get through something, we also brainstorm and have positive constructive conversations with each other around the kids so they can hear it that we're not just complaining about a situation where she's trying to do something and help ourselves get through that particular challenge, but I always say come from a place of empowerment and education, being very honest without oversharing, taking a very calm approach around talking about money around your children, remembering that they're absorbing everything and obviously taking into consideration what is age appropriate, and using those real life moments like at the supermarket with my 11-year-old son paying bills at, say, the post office or Tom and I saying to the kids, "Right, we're sitting down, we're doing our budget. You guys sit there and be quiet, and you can sit and listen, but we need to do this because this is important for making sure that we can pay all the bills on time," so show about how you're handling things in a proactive way and being positive, but also being mindful. That's incredibly empowering for children, and take the pressure off. For example, my daughter was asking for something from, surprise, surprise, Kmart, and I was trying to say, immediate reaction was, "No, that's too expensive, we can't afford it," but as soon as I said it and I heard the awareness, I was like, "Why did I just say it like that?" I said to her, "Actually, hang on, I'm going to explain that again." Right now, that doesn't actually fit within our budget because we're saving for a holiday right now, and if it means we buy that, it means we can't have this, and I went back and started again, so I'm almost like pressed a lead on what I said, and I made good again by saying it in a more empowering way, and including her as part of it. The more I've included my children, and comes in ways, it's not always perfect, but when I include them, they tend to ask for less. My kids constantly want, you buy them one thing and they want something else, and when I include them more of the journey and what we're trying to work on and how we're trying to help ourselves, and I think there's a big thing is your kids seeing you help yourself is essential. It's done a full circle to the point where like, my three-year-old offered to give me some money. She had a little pocket of coins that she probably stole it from me to be honest, but she said, "Here, I'll give you money," and it was so sweet. That is really sweet. Yeah, that she's stealing, or that she's getting back back. Bit of both. Bit of both. There's a conscience there. But when you start to include them, and that's why I say like you're empowering them, you're educating them, explaining that we need to be respectful with money. It's not infinite right now, and we're helping ourselves and taking responsibility. One of the hardest things to do is to walk through Kmart or Big W with kids, right? It's torture. I was in there the other day and the kids wanted something, and I just said to them, "Yep, that's great." I said, "But have you got enough in your pocket money? Have you saved enough pocket money in order to do this?" I'm like, "Well, no, I've got this." I'm like, "All right, well, once you've saved enough, if you still want it, we can come back and buy it once you've saved it." They haven't mentioned it again. Isn't that funny? And so I think that that was just like the impulse kind of thing, and I was just trying to go, "Okay, well, number one, couldn't afford to buy it outright anyway, but maybe just that delayed gratification would actually work," and tying it back to, "Okay, you can do this if that's what you want, but you're going to have to kind of put your money towards it." Exactly. It's experimentation, seeing what works, what doesn't, and hoping we're not doing permanent damage along the way. Oh, I know. The pressure, that's why I say you can make good again. You can go back and say, "You know how I said that we couldn't afford it? Can I explain that to you again, because I really want you to understand what I'm trying to do right now or what I'm trying to do for the family or what our goals are, what our dreams are?" Kids love to be included, and that's the whole, the richness of a connection and the unity of a family. Okay. All right. If a parent is really that we are running out of time, so one last question. If a parent, for instance, or an adult, let's just say an adult, does want to improve their own money habits, right, and to stop being a better role model to their kids, to the young people around them, perhaps, where is the best place to start? I think pocket money is a great place to start. Showing children, I think it's the barefoot investor has the three jars analogy, where it saves, spend, and give. I like that a lot, but I also would recommend strongly that there is an invest jar, so you do four jars, and give them an opportunity to come up with their own goals and their own deadlines, and make it a really fun experience for them. I was talking to a friend the other day, actually, literally about pocket money, and her daughter was very young, and I said, "Don't use coins. Go and get from Spotlight, you can buy them for $2 or $3," and they're these big gems, and she could put the gems in the jars. I know for my daughter, Tyga, who's three, she loves, she has some real coins that she's obviously stolen from me, but she has a little pocket of gems, and she thinks that that's money. I would want that. They're really pretty, actually. There's stars, and circles, and love hearts, and really colorful. No, no, no. I just want just straight-up kind of big old rubies or something like that. Parrot tricks. Absolutely. I think that's where I'm going, and I would bury it all in the backyard and leave it there for someone to find in about 200 years. Wouldn't that be disappointing when they realized it was actually glass from Spotlight? OK, look, if anyone wants more information, where do they find you, Hannah? The best place is always to contact me on Instagram @ShrugamamaTV. Perfect. You can hear me every day with Sean Aylmer on Fear and Greed. Thank you very much for listening to How Do They Afford That? 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