Who is Impacting Your Money Future? - McCarthy Group Who is Impacting Your Money Future? - McCarthy Group

Who do you spend most of your time with? Did you know that there is a strong correlation between the social groups you interact with and your spending habits? How about the effect your parents have on your financial behaviours?

Who remembers going out for dinner with their parents? I know that I used to go out every Thursday night, most of the time to a place which was cheapish, but still a big expense over the course of a year. Many years later I feel almost strange, if in a normal week I don’t go out and grab dinner somewhere away from home.

Why is this the case?

Other than the satisfaction of my fatty food cravings

Other than the satisfaction of my fatty food cravings, that is.

Well academics in psychology and consumer behaviour have identified the way that humans typically manage expectations. How would you judge how good a restaurant is before going? Most of us would say, ‘If somebody has said how good or bad it is to me previously, I’d have a good idea’. Seems fair enough. Now let’s say you go to the restaurant, you’ve not eaten yet you’ve just sat down. Most of us would now judge our expectations on how everything looks. The point of the exercise is to break up how we judge the quality of a good or service. The first part is what we’ve been told previously, the second part is judging what we see and experience before using the product.

But what about things like finance?


Think about your own upbringing. How was finance communicated with you?

We form our expectations about the importance of finance before we even have to worry about it. Every time your parents spent money with you watching, you began performing an expectation about how money works and how you should interact with it. Every time your friends buy expensive clothes, cars or houses you form expectations for how you should be spending your money.

But is this really smart?

The short answer is no, we all have different financial circumstances. I vividly remember a close friend of mine starting to wear Ralph Lauren shirts, and immediately I began thinking ‘Well, my shirts are a bit old, maybe I should be upgrading?’ At the time I wasn’t making all that much, and there was no way I should have been buying something like that, yet I really wanted it!

The next time you think you really need a new shirt or a new car, think about why you want it. Is it really because you need that product for something vitally important? What could you be doing with the money elsewhere?


Investing is the key to being able to spend when you really need to.

Funnily enough, the hardest part about making money is not spending it! The next time you are in the supermarket, really think about it. How much do you need Premium Belgian Waffles? I took this attitude in with me last trip I took to Woolworths and I’m convinced I saved around $30. Now add this up over a year!

So what’s the solution going forward?

Make goals for what you want to achieve with your money. Most people say, ‘Make an extra $10,000!’ It’s said with such derision you’d think they were trying to walk to the moon! But this kind of goal is totally achievable. Take a more functional attitude when you are looking to buy products or services, their necessity and quality in your mind are probably not what they are in reality.

Need help getting a plan together? We offer free financial planning services, so be sure to get in touch to set an appointment!

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