Iona Bain: Hello, I'm Iona Bain, and welcome to A Little Bit
Iona Bain: Richer, brought to you by Legal and General. Now, author
Iona Bain: of Money on Your Mind: The Psychology Behind Your Financial
Iona Bain: Habits Vicky Reynal is here to explain the psychology of
Iona Bain: our spending. Vicky is a financial psychotherapist and runs her
Iona Bain: own clinic in London. She offers psychological support to people
Iona Bain: with money worries, such as overspending or debt, and combines
Iona Bain: this with guidance on making healthier money decisions. She also
Iona Bain: writes a weekly column for The Daily Mail, answering reader
Iona Bain: questions as their financial psychotherapist. Welcome, Vicky.
Vicky Reynal: Thank you. Thank you for having me.
Iona Bain: Firstly, what is financial psychotherapy and how is it different
Iona Bain: from financial coaching?
Vicky Reynal: What I'm trying to help people do is unpick what
Vicky Reynal: feelings or emotions might be driving their money choices. People
Vicky Reynal: might come because they're overly generous and they don't know
Vicky Reynal: why that is, and they know it's against what's best
Vicky Reynal: in their financial interests but they can't stop themselves. What
Vicky Reynal: I often find is that there's feelings that are unconscious that
Vicky Reynal: are getting in the way. My job is to help
Vicky Reynal: them unpack that and understand it so that they can
Vicky Reynal: change the way they behave with money.
Iona Bain: I'm imagining that your upbringing is really important in shaping
Iona Bain: your relationship with money. I've heard that you form your
Iona Bain: attitude to money by the age of eight. I'm wondering,
Iona Bain: is there any truth in that?
Vicky Reynal: There is some truth. I wouldn't pinpoint it to a
Vicky Reynal: specific age because I think that a lot of experiences
Vicky Reynal: that we have in later years will shape our relationship
Vicky Reynal: with money in the longterm. Of course, the money lessons
Vicky Reynal: that our parents teach us growing up will have an
Vicky Reynal: impact on our relationship with money. If they tell us, "
Vicky Reynal: Don't be too greedy," or, " Money corrupts you," that will
Vicky Reynal: be in the back of your mind as you're trying
Vicky Reynal: to ask for a raise, for example. But there's a
Vicky Reynal: lot of non- money related experiences when we're young that
Vicky Reynal: will shape what we do with money when we're old.
Vicky Reynal: Let's say you've been bullied a lot in school, or
Vicky Reynal: you felt different, you might find that, as an adult,
Vicky Reynal: you tend to overspend when you're out with friends. It's
Vicky Reynal: because you're trying to fit in.
Iona Bain: It's like you're trying to buy acceptance.
Vicky Reynal: Exactly. Which isn't about the money lessons learned, it's about
Vicky Reynal: something very different. Or you might see people who really
Vicky Reynal: struggle to spend money on themselves, so they become very
Vicky Reynal: frugal. That might come from a feeling that you're not
Vicky Reynal: really deserving of the good things that money can buy,
Vicky Reynal: that you feel guilty any time you spend anything on
Vicky Reynal: yourself. That might come from experiences growing up in which
Vicky Reynal: maybe your parents were not paying a lot of attention
Vicky Reynal: to you, or harsh teachers, or whatnot, that left you with
Vicky Reynal: a really small confidence in yourself.
Iona Bain: And low self-esteem.
Vicky Reynal: Exactly.
Iona Bain: Someone, I imagine, could be a big spender as an
Iona Bain: adult, but maybe their parents are quite frugal actually. Can
Iona Bain: you explain why there can be those kinds of differences?
Vicky Reynal: Our relationship with money has to do with so many
Vicky Reynal: different psychological factors, like our sense of deservedness, our personality,
Vicky Reynal: which is why you see in families with many children
Vicky Reynal: how siblings might end up having very different attitudes to
Vicky Reynal: money even though they have the same parents teaching the
Vicky Reynal: same lessons. Because what drives our overspending, it could be
Vicky Reynal: coming from social pressures. Lifestyle inflation is very common. That
Vicky Reynal: term basically describes a phenomenon, when your income rises, your
Vicky Reynal: spending rises with it. Your costs go up and you
Vicky Reynal: end up in a worse financial situation on this higher
Vicky Reynal: salary than you before in the first place. Sometimes what's
Vicky Reynal: driving it is internal rather than external. If we don't
Vicky Reynal: feel lovable enough, we might go out there and spend
Vicky Reynal: on maybe beauty products or gadgets. It's that internal insecurity
Vicky Reynal: that might be manifesting through their spending.
Iona Bain: Well, speaking of social pressures, they influence our spending behaviors
Iona Bain: in so many ways. Can you give me a few
Iona Bain: examples?
Vicky Reynal: Yes. The fear of missing out is one that particularly
Vicky Reynal: young people often talk about. There's a lot of insecurity,
Vicky Reynal: sometimes of exclusion, sometimes it's about not being able to
Vicky Reynal: feel part of the conversation next time you're with them.
Vicky Reynal: And even fear of rejection or abandonment in some cases,
Vicky Reynal: so you'll do it literally at all costs. You'll go
Vicky Reynal: to that wedding abroad that you know you can't afford.
Vicky Reynal: People can be so ashamed of admitting that they can't
Vicky Reynal: afford something. But actually, what they end up finding most
Vicky Reynal: of the times is that somebody else in that group
Vicky Reynal: is just relieved that they said something.
Iona Bain: Yeah.
Vicky Reynal: Maybe there is a cheaper restaurant we can go to.
Vicky Reynal: But we often feel ashamed and alone with our money
Vicky Reynal: worries, and that stops us from questioning these social pressures.
Iona Bain: And social media as well must be playing quite a
Iona Bain: big role. How are you seeing that reflected in the cases
Iona Bain: that you deal with?
Vicky Reynal: If we are curious about comparing upwards, well, the algorithms
Vicky Reynal: will pick that up and just feed us more of
Vicky Reynal: that content. Which creates an illusion, because what we see
Vicky Reynal: is people spending and we're assuming that they're in a
Vicky Reynal: better financial situation. What we're not seeing is all the
Vicky Reynal: debt that might be sitting behind some of the spending.
Vicky Reynal: We're left with a sense of shame that everybody else
Vicky Reynal: is doing better than us and we need to catch
Vicky Reynal: up, and not a lot of critical thinking goes into
Vicky Reynal: that.
Iona Bain: There's also this concept of retail therapy. When does that
Iona Bain: become problematic? Why do you think people turn to shopping
Iona Bain: so much as a way to self- soothe?
Vicky Reynal: Because it can be quite effective in the short term.
Vicky Reynal: When you find something that you like and you buy
Vicky Reynal: it, you get dopamine released in the brain, which means
Vicky Reynal: that you do get a real sensation of feeling better.
Iona Bain: You get a high.
Vicky Reynal: It also distracts you, let's face it. Then the effect
Vicky Reynal: fades away, and you're left sometimes with the guilt and
Vicky Reynal: regret. But also, the feelings you were trying to avoid
Vicky Reynal: are still there, be it the sadness, be it the
Vicky Reynal: loneliness, the stress, whatever it was. Isn't it better to
Vicky Reynal: just deal with the roots of the problem, rather than
Vicky Reynal: trying to fix it with a quick boost that then will
Vicky Reynal: leave you feeling worse?
Iona Bain: Does it take quite a long time for people to
Iona Bain: accept that they might have a problem with overspending?
Vicky Reynal: There is a lot of denial around it. We can
Vicky Reynal: justify it in our minds and think that it's normal.
Vicky Reynal: I would invite people to think about what's this about?
Vicky Reynal: Why did I have to go out there and spend?
Vicky Reynal: Really acknowledge the cost, which is not just financial. It's
Vicky Reynal: also all the anxiety it leaves people with.
Iona Bain: Absolutely. In your book, you make a distinction between overspending
Iona Bain: and financial self- sabotage, which is really interesting. Can you
Iona Bain: tell me a bit more about why there's a difference
Iona Bain: between the two?
Vicky Reynal: Overspending can have so many different sources. One of the
Vicky Reynal: reasons why we might be doing it is because we're
Vicky Reynal: unconsciously trying to get into financial trouble. I've seen people,
Vicky Reynal: for example, who were so scared of moving out of
Vicky Reynal: their parents house, of becoming financially dependent, they kept spending
Vicky Reynal: all their money, running out, so that they would have an
Vicky Reynal: excuse to stay home. Another example that I've seen was
Vicky Reynal: one young man who kept running out of money in
Vicky Reynal: the first two weeks of the month. We were trying
Vicky Reynal: to spot patterns. The question that unlocked the case, so
Vicky Reynal: to speak, was when I asked, " Well, what do you
Vicky Reynal: do when you run out of money?" He said, " I
Vicky Reynal: call my dad." I said, " Okay, how's that relationship?" " Well,
Vicky Reynal: I never speak to him anymore now that my parents
Vicky Reynal: divorce."
Iona Bain: Right.
Vicky Reynal: You realize, well, that was his motive. This overspending was
Vicky Reynal: all about ruining the financial situation so that he could
Vicky Reynal: still have a relationship with his dad that he didn't
Vicky Reynal: know how to have otherwise.
Iona Bain: But once you'd unpacked that, it must have absolutely blown
Iona Bain: his mind to realize that that's why he was doing
Iona Bain: what he was doing.
Vicky Reynal: It opened up a difficult question, which is how can
Vicky Reynal: I have a relationship with my dad outside of this?
Vicky Reynal: We needed to think about ways to build that relationship.
Iona Bain: Really, it was more about finding better coping strategies for
Iona Bain: that relationship that would then have a positive knock- on
Iona Bain: effect for how he was managing his money.
Vicky Reynal: Exactly. Overspending is one way to do it, but a
Vicky Reynal: lot of people sabotage their finances by not attending to
Vicky Reynal: them, not talking about money. Suddenly, they're in this big
Vicky Reynal: mess because they weren't opening the bills.
Iona Bain: Yeah.
Vicky Reynal: Begin to unpack, " What am I gaining from this situation?
Vicky Reynal: Why am I doing this?" It could be because, at
Vicky Reynal: some level, you feel you deserve punishment and that's a
Vicky Reynal: very painful thing to uncover. Certain people might go through
Vicky Reynal: life with the sense that they don't deserve anything good. It
Vicky Reynal: could be because you desire rescue and that makes you
Vicky Reynal: feel looked after by other people.
Iona Bain: Do you think sometimes people also fear failing as well?
Iona Bain: That might explain why sometimes people don't want to tackle
Iona Bain: their finances, because that way, they can't fail at it.
Vicky Reynal: That's where sometimes the a- ha moment happens, when they
Vicky Reynal: see that actually, the very thing I was terrified of
Vicky Reynal: is happening through inaction. Is there a way for you
Vicky Reynal: to get more hold of your sense of agency and say, "
Vicky Reynal: Fine. I might not do it perfectly, but doing something
Vicky Reynal: is better than doing nothing." People carry a lot of
Vicky Reynal: shame when it comes to money, and a lot of
Vicky Reynal: fear as well. A lot of times, what helps with
Vicky Reynal: that financial anxiety is knowledge. It's beginning to identify what
Vicky Reynal: is the fear about? A lot of that could be
Vicky Reynal: about not understanding the terminology, or not knowing what the
Vicky Reynal: options are.
Iona Bain: And because it can also feel quite overwhelming. But I
Iona Bain: guess, you got to start somewhere. Once you actually start
Iona Bain: looking into these things, they're probably not as scary as
Iona Bain: you think.
Vicky Reynal: That's right. In fact, when you look at research, more
Vicky Reynal: than 50% of the population suffers from financial anxiety. The
Vicky Reynal: one thing that really decreases the level of anxiety is
Vicky Reynal: financial literacy. The more we know, the less anxious we
Vicky Reynal: feel about it.
Iona Bain: Hear, hear. Knowledge is power. With that in mind, let's
Iona Bain: get to know another concept, the scarcity mindset. How does
Iona Bain: that lead to unhealthy financial behaviors?
Vicky Reynal: Scarcity mindset is the financial equivalent of seeing the glass
Vicky Reynal: half empty.
Iona Bain: Right.
Vicky Reynal: You're focusing on what you don't have, rather than appreciating
Vicky Reynal: what you have and looking at the potential. A scarcity
Vicky Reynal: mindset can be quite unhelpful because it leaves people feeling
Vicky Reynal: very afraid and insecure financially. Some people, when they feel
Vicky Reynal: that way, they might feel paralyzed, rather than starting with
Vicky Reynal: small steps that can help them feel more financial resilience.
Vicky Reynal: For example, putting away, even if it's five pounds a
Vicky Reynal: week, can start building a safety net that's there for
Vicky Reynal: emergencies. Isn't that better than not doing anything? I've also
Vicky Reynal: seen people becoming very frugal or overworking, accumulating, hoarding money,
Vicky Reynal: unable to enjoy it. Unable to ever feel like they
Vicky Reynal: can stop and take a break, and say no to
Vicky Reynal: a project. It's just that anxiety that it generates when
Vicky Reynal: you feel like there just isn't enough, and you're constantly
Vicky Reynal: battling with the worries about the future.
Iona Bain: I'm wondering if Ebeneezer Scrooge had the scarcity mindset. If
Iona Bain: he was a real person, he would do.
Vicky Reynal: Absolutely. What you want is the opposite, the abundance mindset.
Vicky Reynal: Which is one in which you can feel satisfied as
Vicky Reynal: much as one can when it comes to money, but
Vicky Reynal: at least you can appreciate that you have enough to
Vicky Reynal: be doing certain things. Part of the definition of financial
Vicky Reynal: wellbeing is about feeling happy and in control of your
Vicky Reynal: financial choices. There's things that you can do to improve
Vicky Reynal: your situation. But we can also get creative and think, "
Vicky Reynal: Well, maybe there is a little side gig I can start." I don't know, "
Vicky Reynal: I can sell a few things on Vinted or eBay."
Vicky Reynal: Or maybe I can start tutoring to get some extra
Vicky Reynal: cash. When we become paralyzed by fear, it stops any
Vicky Reynal: creative thinking and that's what we need to get hold
Vicky Reynal: of. What can I do?
Iona Bain: Can people start to want more money because they feel
Iona Bain: that what they have is never enough? Is that also
Iona Bain: an example of a scarcity mindset?
Vicky Reynal: Well, yes. It's a result of it. The problem is
Vicky Reynal: that the goalpost keeps moving. If you don't get to
Vicky Reynal: a place in which you can appreciate what you have
Vicky Reynal: and work with those fears, reality check them. Am I
Vicky Reynal: catastrophizing when I feel I don't have enough? Then you
Vicky Reynal: won't be able to move past that, and there isn't
Vicky Reynal: enough money in the world that will help you feel
Vicky Reynal: safe enough if that sense of unsafety is coming from
Vicky Reynal: somewhere else that isn't just financial.
Iona Bain: Yes, because we do hear about incredibly wealthy people seemingly
Iona Bain: never satisfied with how much money they have. But is
Iona Bain: there some truth in the idea that, once you get
Iona Bain: to that point, you're no longer satisfied with what you've
Iona Bain: got? You're just thinking about what you can get next.
Vicky Reynal: I think it comes down to what is wealth for
Vicky Reynal: you, can you define that? Sometimes we get stuck thinking
Vicky Reynal: that things will make us happy. But actually, when you
Vicky Reynal: sit and think about the things that you value, it
Vicky Reynal: might be time with family and friends.
Iona Bain: Yeah.
Vicky Reynal: Sometimes when you are stuck in this greedy pursuit of
Vicky Reynal: wealth, it really begs the question, well, have you attached
Vicky Reynal: more to money than it can actually deliver to you?
Vicky Reynal: Is it that you're imagining it will make you more
Vicky Reynal: lovable, it will attract more friends? There's all these symbolic
Vicky Reynal: meanings that we give to money, and then some people
Vicky Reynal: have the fortune or misfortune of finding out when they
Vicky Reynal: have enough wealth that actually money didn't deliver on its
Vicky Reynal: promise.
Iona Bain: Yeah, you never want to get to that point where
Iona Bain: you work so hard, and then you realize actually, it
Iona Bain: wasn't the money that I needed after all, it was something
Iona Bain: else. Yeah. For those listening who think that they might
Iona Bain: have a scarcity mindset, what would you recommend for them,
Iona Bain: in terms of turning that around and creating more of
Iona Bain: an abundance mindset?
Vicky Reynal: One thing is to catch yourself thinking about what you
Vicky Reynal: don't have and try to very actively just shift what
Vicky Reynal: you're focusing on to what you have. You might write
Vicky Reynal: a gratitude journal about all the things that the money
Vicky Reynal: that you have spent so far has helped you enjoy,
Vicky Reynal: be it holidays or education. Some people find journaling really
Vicky Reynal: helpful and it can be jotting the patterns. Or even,
Vicky Reynal: just brainstorming with open questions. When I think about money,
Vicky Reynal: I feel X. Or even going back to the first
Vicky Reynal: money memories, that can be quite insightful. If all you
Vicky Reynal: remember was parents taking a deep sigh at the till,
Vicky Reynal: then you might begin to understand why you avoid the
Vicky Reynal: topic of money. Or if you watched them argue about
Vicky Reynal: it a lot when you were little, then you might
Vicky Reynal: be avoiding the topic in your relationship. But there's a
Vicky Reynal: lot of other things that can keep fueling this scarcity
Vicky Reynal: mindset, like too much social media exposure. Are you always
Vicky Reynal: looking at what other people have and comparing yourself unfairly
Vicky Reynal: to that? Well, maybe try to do less of that.
Vicky Reynal: Sometimes it's also about watching out what we read, because
Vicky Reynal: there's a lot of news that maybe end up making
Vicky Reynal: you feel more anxious. Choose reading that is more nurturing,
Vicky Reynal: in which you're actually learning how you can improve your
Vicky Reynal: situation, rather than dwelling into how much worse things could
Vicky Reynal: get. Paying attention to all these things can really shift
Vicky Reynal: your perspective onto what is within your control, what you
Vicky Reynal: can do differently.
Iona Bain: Absolutely. One of my mottos is focus on what's doable.
Iona Bain: We can't achieve a perfect scenario with our finances, but
Iona Bain: there are things that we can do. It's about getting
Iona Bain: on with those things.
Vicky Reynal: Yeah.
Iona Bain: Can you suggest three simple money habits that will make
Iona Bain: us feel more secure and satisfied when it comes to
Iona Bain: money?
Vicky Reynal: Well, money is still a big taboo. I would say
Vicky Reynal: the first one is talk about it with people you
Vicky Reynal: trust. If you're worried about money, why not open up to
Vicky Reynal: somebody? You might find that they either have the same
Vicky Reynal: worries, or might have some information that is useful. Talking
Vicky Reynal: about it can help you make sense of things. My
Vicky Reynal: second tip would be create a dedicated time in which
Vicky Reynal: you attend to finances. That's helpful for people on all
Vicky Reynal: ends of the spectrum. Find a time, maybe in the
Vicky Reynal: week or in the month, in which you will review
Vicky Reynal: your finances, maybe set some goals or look at your
Vicky Reynal: accounts, whatever it is, and don't miss it. If you're
Vicky Reynal: a couple, maybe it can be a money date in
Vicky Reynal: which you jointly do that and talk about your finances.
Vicky Reynal: Finally, I would say be curious about why you do
Vicky Reynal: what you do with money. Pick up on the patterns. "
Vicky Reynal: Oh, I always overspend when I'm out with friends." Or, "
Vicky Reynal: It's always on a Sunday when I'm feeling lonely." I
Vicky Reynal: think start by asking yourself why more often. That would
Vicky Reynal: be my third tip.
Iona Bain: Vicky, this has been a fascinating conversation.
Vicky Reynal: Oh, thank you very much.
Iona Bain: Thank you so much, Vicky. Lots of a- ha moments
Iona Bain: there, for sure. Next time on the show, I'll be
Iona Bain: joined by Helen Tupper from Amazing If to talk about
Iona Bain: why our career paths need to be less linear and
Iona Bain: more squiggly. I'd love it if you could follow the
Iona Bain: podcast, leave us a review, and help others get a
Iona Bain: little bit richer, too. You can keep up with the
Iona Bain: show on YouTube, TikTok, and Instagram @ legalandgeneral. Thanks for listening.
Iona Bain: Until next time, see you soon.