Financial Reset: Changing the Way You Think About Money

Moneymagpie Team 16th Apr 2026 No Comments

Reading Time: 3 minutes

If you tend to make poor financial decisions, you aren’t alone. Buying a new pair of shoes on a whim or seeing a discount code sticker on an item that looks good can feel exciting. However, costs can add up quickly, and what feels like a small treat at the time can have a larger impact on your finances than you might realise. Let’s look at some ways you can make a change.

Why Do Some People Have Bad Financial Habits
Healthy Coping Mechanisms
Taking Control of Your Finances

Why Do Some People Have Bad Financial Habits

There are several factors that can lead to poor financial habits. It’s rarely just because someone lacks discipline or isn’t a good decision maker. Instead of being unkind to yourself, reframing the situation to look at the bigger picture can help you see what’s really going on. Some reasons include:

Emotional triggers: If someone’s experiencing negative emotions, such as stress, boredom, or anger, shopping can give them a temporary dopamine rush.
Lack of financial literacy: The school curriculum doesn’t focus heavily on money, leaving gaps in people’s financial knowledge. Instead, some people learn their financial habits from their household, such as from a parent who enjoys impulse spending.
Social pressure: Some people feel pressure to maintain a lifestyle similar to their peers or social media influencers, leading to purchases they don’t need or can’t afford.

Once you understand why and how poor financial habits develop, you can take steps to break patterns. Here are some healthy coping mechanisms you can adopt.

Healthy Coping Mechanisms

Building An Emergency Fund

Having money saved means you’re unprepared for unexpected costs, such as home repairs or vet bills. It also gives you peace of mind, helping you avoid debt and reduce financial stress. For younger people, in particular, developing the habit of saving creates opportunities to invest early and reduce future financial anxiety. One way to save is to put money into a savings account every time you get paid. You can set up automatic payments to help you avoid forgetting. Once your money is in your savings account, leave it in there until it’s needed. Having financial goals in mind can remind you why the money is there, such as plans to buy a property, go on a holiday, or get married. Small amounts matter just as much, and add up quickly too.

Creating Budgets

Having different budgets can give you more control over your purchases and help you avoid overspending. You might have separate budgets for different areas of your life, such as the food shop or when you need to make a new purchase, like a sofa or a car. Many banking apps allow you to catagorise your spending, so you can see where your money is going in different areas from shopping to entertainment. By analysing this, you can decide where you need to save and make budgets accordingly.

Reviewing Your Spending

Not only can reviewing your spending help you set budgets, but it can also prevent financial stress. Some people avoid looking at their spending altogether, which can lead to debt or a lack of awareness about how much is in their bank account. By not reviewing your spending, subscriptions and other costs you didn’t know about can go unnoticed and build up quickly. Once a week, take a look at your spending to maintain awareness.

Avoiding Impulsive Spending

After a bad day, it can be easy to tell yourself, ‘this is a treat’ or ‘this will make me feel better’. However, several impulse purchases can add up fast. Many people also find that an impulse buy is exciting at the time, but they end up not using it. Before buying something, take a moment to think if you really need it. Pausing for a moment can give you more clarity rather than acting straight away. Some people use the ‘24 hour rule’ where you wait 24 hours before buying an item which is non-essential. Leaving it in your online cart or taking a photo and walking away can give you some time to think.

Taking Control of Your Finances

Making changes and creating healthy financial habits can take time and some getting used to, and that’s okay. Start by jotting down a plan for what you want to change, then start practising. And remember, don’t put yourself down! Financial habits are often learned, but there are ways to make a change.

Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.

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