It definitely came from your past, and it can determine a lot about your future. Your money mindset shapes whether you face your finances and make gains, or spin your wheels in avoidance and shame.
Before the pandemic when counselling sessions were mostly in person, Anne Arbour would see a change in demeanour among clients that came into the Credit Counselling Society.
"People would be stressed — their shoulders up and their head down — and they go and speak to (a credit counsellor) and come out, and their posture is completely different," said Arbour, director of partnerships and education.
"Their facial expression is completely different — not because their money situation has changed, but because they’ve unloaded and they faced it. And they realize that maybe, you know, there’s a solution somewhere."
One obvious symptom of a poor money mindset is financial trouble — the former can cause the latter, or vice versa. Other symptoms include anxiety, denial and avoidance, disorganization, shame, and struggling to even talk about it, Arbour said.
Natasha Knox, financial planner and founder of Alaphia Financial Wellness in the Greater Vancouver Area, would add a few other symptoms: relationship problems, feeling too overwhelmed to even begin taking positive steps, and being disconnected from reality.
Your attitude toward money is shaped by many factors, Knox said, including childhood experiences. It’s possible we will repeat our parents’ mistakes with money — but if their issues caused us stress, she noted, we might develop an aversion to their habits.
"You can have someone who, let’s say, grew up in a family with a lot of financial secrets," Knox said. "They may be very secretive in their own habits, but they might actually take the absolute opposite approach. They may adopt a radical transparency approach."
If your relationship with money is an unhealthy one, the first step is education.
There are free and reputable resources in any format — news sites, articles, books, videos, courses, reading material from government websites and financial institutions — and Arbour noted that not-for-profit credit counselling agencies offer free one-on-one help, even via online chat.
Education will build confidence, Arbour explained, which helps combat the negative emotions around finances. She also recommends setting small goals, such as an emergency fund. Although many advisers recommend large emergency funds worth three to six months of living expenses, she pushes for easier goals.
"Start with a goal of $200, and then raise that to $500, and then raise that to $1,000," Arbour said.
"A lot of little emergencies can be handled for under $1,000. Don’t let the big numbers overwhelm you … start small and build the momentum from there."
Even a fun goal, such as a vacation fund, is good to build saving habits: "It gives you focus and a little more direction with your money. I think that helps people to know what they should be doing."
Sometimes, financial literacy isn't the root of the problem: you know what you should in theory be doing — but your habits are holding you back, Knox said.
Advice about money isn’t helpful for someone who is ignoring, avoiding or acting impulsively.
"Honestly, it is a matter of learning to manage your nervous system," Knox said. "Very often, these issues that we encounter is because we’re in a fight-or-flight situation. In fight or flight, the whole logical brain is gone, so what we need to be working on is noticing what’s going on for us in our nervous system, and our responses to things."
Knox recommends paying attention to triggering situations, and recognizing how you're thinking about the situation — "mind chatter," she calls it. Those thoughts may or may not be grounded in reality.
"I found some of the biggest emotions people feel around money — that contribute to challenges with money — are shame, fear and guilt," Knox said.
"You've tried the education route, now you know what to do, but it’s still a problem. There is a good chance it’s rooted in those powerful emotions. We work really hard not to feel them, right? We will do almost anything to avoid those three feelings."
Although it’s not as simple as a money tip or hack, Knox said overriding negative emotions to make good financial decisions "is actually the key to lasting change."
So what does a healthy money mindset look like? Being able to talk about money, knowing when to seek help, being able to take action — Knox says these are all good indicators.
For young people who are working through debt in entry-level careers, their mindset will have to be realistic.
Don’t focus on monthly costs alone, Knox said: look at expenses over the year. Moving out versus staying at home a little longer, living alone versus getting a roommate, getting a car versus taking transit — these decisions add up to thousands of dollars annually.
"A healthy relationship with money looks like having a clear idea of what you can and cannot do, a clear idea of ‘enough,’ being able to live a fulfilling life within those boundaries, knowing what purpose money serves in your life, knowing what you will or will not do with money," Knox said.
"The ones who have a healthy relationship with money, and also the ones that tend to get ahead further, are the ones that are willing to make compromises that other people aren’t."
This report by The Canadian Press was first published Feb. 4, 2025.
Nina Dragicevic, The Canadian Press
