Ditching debt and building wealth isn't about being super smart, it's about recognising your self-defeating thought processes and making small habit changes. Frances Cook has some tips.
If being "good with money" were as simple as knowing what to do, we’d all be brilliant.
We'd have emergency funds, maxed-out KiwiSaver contributions, and investments ticking along. No debt, regular pay rises, the works.
And yet, we know that’s not the case for many of us. In fact, one in three New Zealanders would struggle to cover an unexpected $500 expense without having to borrow, sell something, or stick it on the credit card (according to Kiwibank’s 2024 Annual State of Savings Index).
Yes, times can be tough, but there’s also the reality that healthy finaces are about more than just numbers and knowledge.
Money is an issue that’s deeply wired into our behaviours and emotions, and unfortunately, our wiring usually works against us when it comes to making good financial decisions.
It’s not that we’re bad with money, it’s that we’re human.
The first step is to understand the psychology that all of us can fall victim to, and then start working with your brain, instead of against it.
1. The 'I’ll start later' trap
The problem: Procrastination is a financial killer. We tell ourselves we’ll start saving or investing when we “have more money". But when more money comes, we find new things to spend it on.
The longer we wait to start these good financial habits, the harder it gets to catch up.
The fix: Set it and forget it, even if the first step feels small.
If something feels too big to tackle all at once, shrink it down. Automate a small weekly transfer into savings. Start investing with $20, not $2000.
The hardest part for most people is simply getting started – momentum builds from there.
2. The 'I don’t know enough' fear
The problem: Many people hesitate to make the big money moves, like starting to invest or negotiate a pay rise, because they don’t feel like an expert.
They worry about making mistakes, so they do nothing.
Problem is, waiting until you know everything means you’ll never start.
Think about how you act when it’s an issue like fitness, instead. Sure, there’s lots to learn about proper running technique, and how to improve form. But you can learn that as you go. Meanwhile, pull your shoes on, and start running.
If you want to start investing, you don’t need a finance degree. Start with something like KiwiSaver, which is probably already ticking along in the background, and already requires your KiwiSaver provider to give you free financial advice if you’re feeling confused about your options.
Well, technically it’s not free, as you pay a fee to your KiwiSaver, and part of the deal is that they explain what’s going on. So really, it’s pre-paid. So, seeing as you’ve already paid, make use of it.
Same goes for negotiating your salary – gather some market data, practice your pitch, and ask. Worst case, they say no, and you’re where you started. Best case, it works, and you’ve got more cash. Either way, you’ll have learned more about how you want to go about the pay rise conversation next time.
3. The 'more money, more spending' problem
The problem: This one’s sneaky. You get a pay rise, and instead of feeling richer, your expenses just creep up to match.
New car, nicer clothes, a few more takeaways each week.
It feels justified because, after all, you’re earning more, and you worked hard to get here.
But if every pay bump disappears into lifestyle upgrades, you’re stuck on a treadmill of always needing to earn more, and never getting to enjoy your new financial security.
The fix: Yes, you’ve earned a break. But that break should include relief from financial stress. So before you spend more, save more.
Whenever your income increases, first decide how much will go toward long-term wealth (KiwiSaver, investments, savings, extra mortgage payments).
Set that up as an automatic payment, before lifestyle spending expands to fill the gap.
Once you’ve set up the long-term plan, enjoy what’s left, absolutely guilt-free.
4. The 'I’ll just put it on the credit card' excuse
The problem: The faster you can buy something, the more likely you are to fall into the impulse-buy trap.
Credit cards are killer for this, letting us buy something with debt before we figure out we don’t really want it.
Little treats at $50 a pop, that we plan to pay off later, add up fast. Add high-interest debt on top of that, and you’re quickly spiralling into a debt trap.
The fix: Force yourself to delay.
If you want to buy something non-essential, wait 24 hours at least. Stretch this to a week-long delay for bigger purchases. Often, only an hour or two later, the spell is broken and you realise you didn’t want it at all.
If you do still want it, but it’s not in the budget, then use the delay to think of smarter ways to make it work within your budget.
Then, if you want it and can afford it, get it, guilt free, and enjoy.
"Good with money" is built with habits, not smarts
We all have financial blind spots, but the good news is that any habits, and especially money habits, can be trained.
The trick is making things easier on yourself. Make it easy to do the things that support your goals, and harder to do the things you know won’t help you.
Automate savings, remove friction from good decisions, and create small systems that nudge you in the right direction. Meanwhile, put blocks in the way of things like using debt, or impulse spending.
If you’ve made financial mistakes in the past? Join the club.
The point isn’t to be perfect, it’s to get better, little by little.
Small, smart money moves today, will make your future self much happier.
The information in this article is general in nature and should not be taken as personal financial advice.
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