Boost your financial health: expert tips from Evan Lucas

6 July 2024

Western-Sydney mum Lauren Borg on set of The Brighter Side
  • Open, honest discussions about finances can help set and achieve goals with confidence. Start conversations in a relaxed setting with open-ended questions
  • Addressing “tunnelling” and “planning fallacy” can improve money management. Use the 50/30/20 rule to balance bills, savings and debt repayment
  • Recognise and resist marketing tactics like “social proof”. Do your own research to make informed buying decisions

Sticking our heads in the sand, ignoring bad habits and falling for social approval can mean we miss out on great savings and investment opportunities. If you identified with one (or all) of the above, read on to see how to rewire your thinking.

Mental hack #1: Conquer the money talk

It can feel so hard to talk about money. But what are we afraid will happen when we open up? “When we compare ourselves with others, we risk feeling loss but there are great gains to be had in discussing finances,” says Lucas. “Talking about it can help us reach our goals by helping us face financial facts with confidence.” According to Lucas, when it comes to having good, honest discussions about money, you’ve got nothing to lose – and everything to gain. Start the conversation in a relaxed setting, like over a meal or coffee, and use open-ended questions to ease into the topic. For example, ask, “What are your thoughts on saving for a big purchase?” This can make the discussion feel less intimidating and more like a shared journey towards financial wellbeing.

Mental hack #2: Beat money habits that set you back

There are two habits many of us have when it comes to money that present opportunities for quick improvement. The first is called “tunnelling”. “It’s when you focus so intently on the problem in front of you that you lose sight of the bigger picture,” Lucas explains. For example, you pay off today’s bills but ignore long-term savings or investments.

The second is called “planning fallacy”. That’s when we underestimate how much something will cost or how long it will take to pay off. “Kind of like when you thought you could pay off your credit card in just a few months, only to find it took a year,” he says.

The next time you find yourself slipping into one of these modes, “Take a step back and be realistic about your goals and timelines,” he suggests. “Managing money isn’t just about maths – it’s about understanding our minds.” You could aim for a more balanced financial plan by allocating specific percentages of your income to immediate bills, savings and debt repayment. For example, follow the 50/30/20 rule: 50 per cent for necessities, 30 per cent for discretionary spending and 20 per cent for savings and debt. This approach helps ensure you’re addressing both short-term obligations and long-term financial goals, setting yourself up for a brighter financial future.

Video: Mind Over Money: Evan Talks “Social Proof” When it Comes to Spending

Mental hack #3: Resist social pressure when shopping

This may sound familiar: you’re scrolling through an online store for a specific item when a message pops up. It will say something like, “Bernie from Brisbane just bought this item,” or “Three people are looking at this item right now.” This compelling device is called “social proof” and retailers use it to sway our decisions. “It makes us think, ‘If they’re buying it, it must be good,’” says Lucas. “But these are often marketing tactics, not genuine indicators of quality.” Next time you’re shopping for something, don’t give in to what Lucas calls “psychological nudges”. Remember that reviews can be manipulated by providing incentives to the reviewers and celebrities are usually being paid for their endorsements. “Don’t just follow the crowd,” says Lucas. “Do your own research.”

For more money saving tips and support to help you navigate the rising cost of living, visit our Cost of Living Support Hub.

Things you should know

This article provides general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as personal financial product advice. The views expressed by contributors are their own and don’t necessarily reflect the views of CBA. As the information has been provided without considering your objectives, financial situation or needs, you should, before acting on this information, consider the relevant Product Disclosure Statement and Terms and Conditions, and whether the product is appropriate to your circumstances. You should also consider whether seeking independent professional legal, tax and financial advice is necessary. Every effort has been taken to ensure the information was correct as at the time of printing but it may be subject to change. No part of the editorial contents may be reproduced or copied in any form without the prior permission and acknowledgement of CBA.