Introduction
Shadi Kirk explores how early life experiences continue to influence adult financial behaviour. With years of experience supporting clients to reshape their money mindset and build healthy financial habits, Shadi believes that lasting financial success begins with greater self-awareness.
Why Your Childhood Still Shapes Your Financial Future
Think back to your earliest memories of money. Was it pocket money from a grandparent? Saving up for a toy? Watching your parents worry over bills or celebrate a windfall? We often assume our financial decisions are driven by logic and information. But beneath the spreadsheets and investment platforms lies something more personal — the emotional and behavioural imprint formed in childhood.
Your relationship with money — how you spend, save, invest, or avoid it — is often rooted in those early years. While education and income levels certainly shape your financial journey, the subconscious habits you developed as a child may have a surprisingly large influence on the decisions you make today.
The Research: Your Financial Habits May Be Set by Age Seven
A pivotal 2013 study by researchers at Cambridge University found that core money habits are typically formed by the age of seven. These behaviours — including emotional responses to spending, saving, and planning — often persist into adulthood. This isn’t just about understanding how to count coins. The researchers highlighted that children as young as seven are already absorbing behaviours linked to self-control, delayed gratification, and emotional regulation — all essential traits for good financial decision-making later in life.
Meanwhile, Nationwide’s more recent research revealed that 88% of parents with children aged 8 to 13 believe financial education would help their children better understand the value of money. But if foundational behaviours are in place before age eight, then financial education may already be playing catch-up. That said, just because your habits are formed early doesn’t mean they’re fixed forever.
Mindset Matters: Why Emotional Habits Trump Technical Knowledge
As adults, most of us understand the rational aspects of finance — the benefit of investing early, the logic of compound interest, the advantages of tax wrappers like ISAs. But knowledge alone doesn’t always drive behaviour. Take investing, for instance. You might fully understand the long-term benefits of holding your investments through market volatility. But if fear prompts you to sell during a downturn, your behaviour could sabotage your own returns.
In fact, a report cited in FTAdviser estimated that emotional decision-making costs investors at least 2% per year in missed returns. Over the course of a 25-year investment journey, this can erode tens of thousands of pounds in growth — all because of fear, impatience, or poor impulse control. So what’s the solution? Understanding your behavioural patterns — and consciously interrupting them — is the first step.
How to Break Free From Harmful Money Habits
Changing your financial mindset isn’t about becoming emotionless. It’s about bringing greater awareness to your financial decisions and developing new habits that align with your goals. Here are four practical ways to start:
1. Reflect on Your Money Story
Before you change how you handle money, take time to understand your current behaviours. When you make financial decisions — large or small — what’s really driving them?
- Do you spend impulsively when stressed?
- Do you hoard savings out of fear of loss, even when you have surplus cash?
- Do you struggle to invest because your parents never did?
Your money story is layered. It can be shaped by experiences such as parental arguments over money, sudden financial shocks, or messages like “money doesn’t grow on trees.” Reflecting on these influences isn’t about blame. It’s about recognising patterns. Once you’re aware of them, you’re better placed to choose differently.
“Many of our clients don’t realise how deeply rooted their financial behaviours are. When we help them unpack those habits, it opens the door to healthier, more empowering financial choices.”
— Shadi Kirk, Independent Financial Planner, Transform FP
2. Review Your Finances Regularly (and Honestly)
Life is busy. It’s easy to avoid financial admin or delay reviewing your investments. But avoidance often reinforces unhealthy money habits — especially if your default response to finances is fear or discomfort. A regular review, ideally every quarter, can help you spot red flags early:
- Are you dipping into your emergency fund for non-essentials?
- Have you stopped contributing to your pension to cover short-term wants?
- Are you ignoring investments because volatility makes you anxious?
Looking at the real impact of your decisions brings accountability — and with it, change.
“Avoidance is often fear in disguise. Reviewing your finances regularly, even if it’s uncomfortable at first, can break that cycle and help you build confidence over time.”
— Angus Kirk, Independent Financial Planner, Transform FP
3. Take a Pause Before Big Decisions
We live in a fast-paced world that often encourages instant gratification. But major financial choices — switching investments, borrowing for big-ticket items, making early withdrawals — deserve reflection. Next time you’re making a significant financial decision, hit the pause button. Sleep on it. Let emotions settle. Review your goals. Ask yourself: Will this choice move me closer to the life I want? Delaying impulsive decisions by even 48 hours can give your rational brain time to catch up to your emotional instincts. Over time, this “built-in pause” becomes a new habit in itself.
4. Work With a Financial Planner Who Understands Behavioural Triggers
While many people seek financial advice for tax or investment support, a skilled financial planner can also help you uncover the emotional and psychological patterns behind your decisions. Together, you can:
- Create a financial plan aligned with your long-term goals
- Identify emotional triggers and high-risk scenarios
- Model different scenarios so you can see how today’s decisions impact tomorrow’s lifestyle
More importantly, a planner becomes a thinking partner — someone who helps you stay grounded when emotions run high and encourages you to see the bigger picture. The result? More consistent decision-making, a clearer sense of purpose, and a financial journey that feels less reactive and more intentional.
Conclusion: Heal the Past, Plan the Future
Our money habits don’t emerge from nowhere. They are shaped, often subtly, by the experiences and messages we absorbed as children. Some of those habits serve us well. Others hold us back. By reflecting on your past, increasing your financial self-awareness, and embracing professional support, it’s entirely possible to reshape your money mindset — no matter your age or income. Because ultimately, financial planning isn’t just about your money. It’s about who you are, what you value, and how you want to live.
A Gentle Invitation to Begin
If you’d like help exploring your financial behaviours, setting purposeful goals, and building a plan rooted in both sound advice and emotional wellbeing, we’re here for you. Our approach is thoughtful, personalised, and always focused on helping you feel more confident and in control of your future. Contact us today to arrange a no-obligation conversation. The first step is simply understanding where you are — and where you’d like to go.
Important disclaimer: This article is for general information only and does not constitute financial advice. The information is aimed at retail clients only. The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. The Financial Conduct Authority does not regulate estate planning, tax planning, or will writing. We recommend that you speak to a qualified financial planner for advice tailored to your individual circumstances and goals.
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