Wealth Insights
Money mindset: The psychology behind financial behavior

Article 11 min read Published April 14, 2026

Exploring what influences how we earn, spend and save.

When it comes to money matters our roots run deep and may knowingly or unknowingly influence our mindset. These layers of meaning are shaped by past experiences, family narratives, cultural influences, risk tolerance and personal responsibility.

Behind individual financial behaviors lies a deeper psychology shaped by our attitudes and relationships with money, where unconscious and conscious beliefs and emotions can influence financial behaviors and decisions. Understanding and unlocking the role mindset plays is an important part of building and preserving wealth, sustaining purpose and making choices that align with what matters most.

What is a money mindset?

Defined as an ingrained set of beliefs, attitudes and subconscious patterns about finances, your money mindset shapes how you earn, save, spend, invest and manage debt.

So where does this mindset come from?

Financial beliefs are often formed from early experiences including childhood, and influence behaviors, confidence and habits. These beliefs can be conscious or unconscious. Everyone has goals and beliefs that are front and center when influencing financial decisions, such as: “I enjoy travel and am saving for a vacation home,” or “Education is important to me and I am saving for my children’s college tuition.”

However, there are often unconscious beliefs around money that may be at play. These are often automatic rules and feelings that stem from our experiences, cultural influences or family dynamics that we may not be fully aware of when making financial decisions.

Common money mindsets

1. Scarcity vs. abundance

The belief that there may never be enough money—despite financial statements that would say otherwise—is a scarcity mindset. It may lead to anxiety, hoarding, poor spending or saving habits, and a focus on what’s missing. It might stem from past experiences and can hinder financial growth by creating a persistent fear of loss and limiting opportunities. A scarcity mindset may make it challenging to enjoy the fruits of your labor, while uncertainty around what lies ahead may fuel this sense of lack and anxiety around spending.

“A scarcity mindset can impact people across financial demographics and in some cases, it is completely unconscious,” notes William Chenoweth, Wealth Advisor. “It isn’t uncommon for a millionaire to second-guess the purchase of a vacation home or even a new car. As a wealth advisor, it is my job to merge the math and the emotions to help my clients navigate financial decisions.”

A mindset of abundance believes there is enough for everyone and that resources, opportunities and success are plentiful. This mindset fosters a sense of creativity, calculated risk and belief in creating opportunity. Those with an abundance mindset may look to invest discretionary funds, focus on value creation and view wealth as a result of growth, sharing and confident long-term planning. Taken out of context, however, an abundance mindset could fuel overspending if the belief spills into one of overconfidence. It is important to balance what you want with what is financially sound and realistic. If someone wants to purchase a vacation home, they may need to forgo the country club membership or annual extravagant vacations if the financial picture doesn’t align with expectations.

2. Money status mindset

Often recognized by the phrase “keeping up with the Joneses,” in the money status mindset, self-worth is often tied to wealth. This can lead to overspending in an effort to appear wealthy. The information age—and specifically social media—has ushered in an even wider net of “Joneses” and influencers to try to keep up with.

“Social media has an incredible influence,” notes Bryan Koepp, Wealth Planning Executive. “Anyone can present themselves as an expert and everyone is susceptible, even the professionals when dealing with their own personal finances, to buying into ideas that may look extremely attractive but ultimately don’t pan out or don’t fit with an individual’s goals, values or tolerance for risk.”

Koepp points out that at the heart of it all, we all want to be successful, whether that is for self-worth, to impress our family or friends or give ourselves meaning. “When we lose sight of the why, and the financial move doesn’t meet the test for what someone is trying to accomplish, it is a good time to pump the brakes, take a pause and think.” Whether that pause involves time to meditate or call a trusted friend, loved one or advisor, this tactic can help prevent impulsive decisions driven by the fear of missing out and less than desirable outcomes.

Understanding possibilities—and limitations

What makes money mindsets unique are the individuals themselves, says Chenoweth. “The key to creating the right plan is to really understand each client’s goals, values and desires for their financial future.”

Are you saving for a second home? Looking to fund a college education for kids or grandkids? Hoping to create a giving plan to support a charitable organization close to your heart?

“We approach client relationships as a team with the goal of helping our clients make the decisions to better approach managing their money in a way that allows them to accomplish their goals and support their values, while accounting for potential future expenses such as healthcare and long-term care.”

Financial decisions are very often emotionally driven, and the uncertainty that comes with that may lead people to hesitate or second-guess themselves during the decision-making process. Sometimes ingrained conscious or unconscious influences can be challenging to change. “Retirees who have saved for decades may find it unsettling to see the balance of their 401(k) or savings decreasing once they are past their earning years,” Chenoweth says. It is important to balance the approach of wanting to spend and enjoy the money versus overspending and perhaps running out of money or not having enough saved for potential healthcare costs, which have been on the rise.

“As advisors we look at the process and focus on organizing goals and purpose, aspirations and quantitative testing of what those are to manage risk,” says Koepp.

Financial psychology

An emerging field, financial psychology is the study of why we do what we do with our money. But you don’t necessarily need to hire a financial psychologist to help discern the cognitive, social, emotional and cultural factors that may influence your financial decisions. When looking for or working with a wealth advisor, trust is absolutely key.

“As financial professionals, it is our priority first to listen without judgment and keep an open mind,” says Koepp. “People’s fears can be real, and we all interpret and think about things from our own unique perspectives. Leading with empathy and meeting people where they are with understanding gives context into what is driving their financial decisions—their money mindset.”

Without trust, he says, the conversation may be very superficial, and you may miss clues that could change the trajectory of the right approach to suit their needs, values and desires.

The expanding role of artificial intelligence

We all know that AI is here, and will likely continue to grow and influence the way we work, live and do business. So, what role does technology and AI play in relation to money management and the psychology of money?

The AI component may allow members of your wealth team to spend more time on these aspects of financial planning.

“AI tools may enhance efficiency in generating forecasting materials, but professional judgment remains essential as we focus on the heart of our clients’ financial issues, concerns, values and desires,” says Koepp. “The acceleration of AI in this industry is incredible. We’ve really taken the next step—the practical application is helping with efficiently and capability, freeing us up to spend more time with our clients having conversations such as these.”

This is our calling

“It is our calling to help our clients navigate their finances through most of life’s situations,” shares Koepp. “We are here to tackle the tough issues, talk through the emotional issues and help our clients through the maze to help provide greater clarity and informed decision-making to meet their financial needs.”

These strategies work together depending on each client’s individual situation.

There are established approaches to transitioning wealth and earning income.

Koepp emphasizes that his team’s goal is to help clients make informed financial decisions and ultimately feel confident in them. “If we’ve done that, we’ve done a lot of good.”