Whether we’re aware of it or not, we all host a constant chatter within our minds. This internal voice, our self-talk, has a profound influence on our perceptions, decisions, and behaviours. Often, this self-talk can be overly critical, casting doubt on our actions and decisions, particularly when it comes to our financial health. However, what if we could reshape this internal dialogue to be more supportive and optimistic?

Reframing this inner critic isn’t about silencing it – it’s about changing its narrative. Instead of harsh judgments or predictions of doom, we can train this voice to be more objective, understanding, and solution-focused. A crucial step towards this is challenging unhelpful thoughts and replacing them with realistic, positive alternatives.

Cognitive Behavioural Therapy (CBT) presents a useful framework for this mental shift. It is based on the premise that our interpretations of a situation significantly influence our emotions and behaviours. When it comes to financial planning, the principle is no different. For instance, viewing an investment loss as a catastrophic failure can send us into a spiral of negative emotions and behaviours. However, reframing it as a learning opportunity can foster resilience, wisdom, and a proactive response.

Ethan Kross, a renowned psychologist, brilliantly explores this concept in his book, “Chatter: The Voice in Our Head, Why It Matters, and How to Harness It”. He reminds us that we all have the power to transform our inner critic into an internal coach. Kross shares a thought-provoking quote, “The mind is flexible, if we know how to bend it. If you have a fever, you can take something to bring it down. Likewise, our mind has a psychological immune system: We can use our thoughts to change our thoughts – by adding [healthy] distance.”

This brings us to a simple yet potent question you can ask yourself when your internal critic starts clouding your financial decisions: “How realistic is my thinking?” By evaluating the accuracy of your thoughts, you can detect if you’re catastrophising, overgeneralising, or jumping to conclusions. If you find your thought lacking in realism or being outright wrong, you can then take steps to replace it with a more constructive one.

At Succession Financial Planning, we are committed to supporting our clients in their financial journeys. Our aim is to empower you not only with financial strategies but also with psychological tools that enable you to manage your financial life with a positive, resilient mindset.

After all, our financial health is inextricably linked with our mental well-being, and a balanced approach is key to long-term success.