By Ceara Nicolls. 

If you’ve ever tried to change a habit, you’ll know it’s not always easy, and changing financial habits is no exception. If the thought of wrangling your finances into order gives you a low-key tension headache, you’re not alone. With close to 60% of New Zealanders admitting to spending more than they earn, it is clear that there are many of us paddling in this particular waka!

Forming good financial habits, like budgeting, tracking our spending, or making wise and informed choices with our money, is an ongoing process of overcoming old ways of thinking and translating our intentions into action. If you think that this sounds a little wishy-washy, we’re here to explain the science behind behaviour change and to give you some concrete tips for putting this into practice.

Important note: This article is aimed at providing some tips for how to manage behaviours around how we use our disposable income. We acknowledge that many don’t have extra cash to spend, nor the resources to receive external financial support and guidance. We hope you find something of use below or the inspiration to look at other resources available, such as free, independent ideas from Sorted NZ. 

Model of behaviour change

A well-known model of behaviour change, the Transtheoretical Model, was developed by psychologists Proschaska and DiClemente in the 1970s. This model, as seen in the diagram below, describes the six stages of change that a person goes through when attempting to alter their behaviour. When we apply this model to our financial behaviours and habits, we can pinpoint where we are in the cycle of behaviour change – and what might help us to move forward.