Very few of us are naturally suited to creating a financial plan and then consistently doing what we need to in order to achieve it. 

As human beings, we have to accept that many of our natural behaviours are not well adapted to making good long-term plans and financial decisions.

We all have habits and reflexes that are potentially harmful to our financial wellbeing and our ability to achieve long-term goals. Here are 10 ways in which you might act against your own best long-term interests and some ideas for how you might change the way you think and behave around money.

10 WAYS TO CHANGE HOW YOU THINK AND BEHAVE AROUND MONEY

1. It’s very difficult to imagine your future-self decades in the future, when subjects like pensions and care costs become very real. Try to identify with a loved one who is already at that stage of life and imagine yourself in their position.

2. Write down your goals and the behavioural changes needed to achieve them, which helps to formalise the commitment you are making to yourself and others.

3. We are very good at justifying our own behaviour, even if we know it is wrong, so as well as being very clear on what you have committed to do and/or change, try whenever possible to be accountable to somebody other than just yourself for those improvements.

4. We are capable of behaviours that work directly against what we are trying to achieve, for example spending more than we should even if our objective is to retire early. Identify these behaviours and try to understand, the sometimes unconscious, reasons behind them as a first step towards improvement.

5. Learn the emotional triggers that lead to poor financial behaviour, such as excessive spending and try to avoid or manage them.

6. We have a natural tendency to overestimate our ability to change and the speed at which we will see improvements. The more that you can create a systematic approach, such as creating an automatic monthly transfer to a savings account, the less room you leave yourself to deviate from the plan. Try to focus instead on small daily actions that will over time create significant long-term change.

7. Consciously replace a negative behaviour with a positive one allowing you to concentrate on the new habit rather than lamenting the loss of the old one.

8. Understand your previous behaviour around money and accept that, without making a conscious effort to change, this behaviour pattern is very likely to reoccur.

9. You might be more inclined to change behaviour if it is for the benefit of somebody else such as your children rather than just yourself, so create motivation by imagining how and who you are going to help.

10. We naturally avoid thinking about negative events and their consequences but be brave enough to think about what could go wrong and what the world would look and feel like if it did. This can provide the motivation you need to take action.