Author: <span>lynnewoolfson</span>

The psychology of money

A few weeks ago, a client sat in my office and told me about her “A-ha” moment with money. “It’s taken me forty five years, but I finally think I’ve got some insight into why I’ve never been able to save or get out of debt,” Judy said.

I smiled, eager to learn more and pricked up my ears. Judy always has a wealth of stories, information and knowledge.
She told me about some reading she had been doing on budgeting and saving, citing the Barefoot Investor by Scott Pape as a game-changer. Once thing in particular that she spoke about enthusiastically was how saving should be automated. 

Hmmm. This made perfect sense. I made a mental note to do my own digging into the psychology of saving (and spending!)—an area I know little about.  

That night I did some Googling and came across Richard Thaler, the behavioural economist who won the Nobel Prize for economics last year for his work researching the emotions and behaviours that influence our spending patterns.  

What Thaler and others said intrigued me. For while no magic panacea exists for wealth creation, there are strategies to support more positive financial wealth.
Let’s look at them.

Saving and Spending
From the getgo, we are told we need to save money. But we’re also battling with basic human nature – spending it! Thaler and his peers have extensively researched this contradiction. In a 2009 interview with the Financial Times, Thaler said:

 “Conventional economics assumes that people are highly-rational – super-rational – and unemotional. They can calculate like a computer and have no self-control problems. They never over-eat, they never over-drink, they save for retirement, just the right amount – first by calculating how much they need to save, then by religiously putting money aside. Real people are not like that.”

I love that Thaler talks about “real people.” Real people are the ones I see in my clinical practice. And based on the real people I’ve encountered over the years, I can tell you that financial management, much like weight management, does not come easily for many. 

In a nutshell, Thaler argues that human beings are affected by
behavioural biases that then affect our financial choices and thoughts.

So what are these?

The Endowment Effect
The endowment effect looks at emotional attachment to objects.  What we own, we value more than what we don’t own. This helps explain why we often have unrealistic ideas about the value of our items we hope to sell.

Loss Aversion
People dislike forfeiting something once they have it. In other words, if you are given something but then have to give it back or have it taken away, the pain of the loss is felt more acutely than the original gain.    
A study done on capuchin monkeys by Venkat Lakshminaryanan and colleagues illustrates loss aversion. The researchers set up a trading scenario where monkeys could buy pieces of apple from different sellers. Seller #1 would present one apple piece and hand it over, while Seller #2 would present two but then take one away, presenting the monkey with only one piece. Even though both sellers gave the same outcome, the monkeys strongly preferred Seller 1. This led the researchers to argue that loss aversion and economic biases are innate in not only in human beings but also in our predecessors, monkeys!

Maybe loss aversion explains why even top high earners find themselves in tax predicaments, when they bank rather than automate the deduction of their tax from their annual partnership pay-outs. In so doing, they often spend money they believe to be theirs even knowing rationally it is not.

What does all of this mean about budgeting in everyday life and being financially savvy?

Automate, automate, automate….
Many behavioural economists and financial advisors argue that to save money, we need to remove discretion and automate our savings. In other words, to remove the temptation to spend it, put it away before you’ve even seen it. This counteracts loss aversion.

An increase in rounding-up banking services and automated savings apps supports this. Superannuation in Australia is a classic example of automated saving – it goes to our fund and is untouchable before we’ve even seen it.

Mindful spending

Mindfulness is not only a strategy for emotion management but also for financial management. When we take the time to spend and save mindfully, we increase the potential for living within our means and forgoing purchases that do little to enrich our lives.  

Know your financial position

The age-old mantra, “you can’t manage what you don’t measure” rings true for me with money. In today’s busy world, sometimes it’s easier to bury your head in the sand rather than unearth a true picture of your current and forecasted financial position. In taking the time to look at your finances pragmatically, you are far better equipped to manage them and spend within your means.

Factor in treats

In his book, The Barefoot Investor talks about the importance of “blow” and “smile” buckets. In other words, he suggests that you factor in allowances in your budget for things that you enjoy – dinners with friends, new shoes or whatever puts pep in your step. Treats minimise a deprivation mentality and help us stay on course.

Accept that you’re playing the long game.
Economic transformation doesn’t happen overnight. It’s a long-term commitment. Once you understand this, you are more likely to meet your expectations.
Armed with this fresh awareness of money and human behaviour, I intend to make some changes in my own spending patterns this year–making sure I factor in plenty of treats! I wish you the prosperity and good fortune you might be seeking too.

Note: This post is in no way intended to replace the advice of a qualified financial advisor. Readers are encouraged to fully research their own financial decision making. Special thanks to my client Judy  who has graciously allowed me to share her story with you.


Great Expectations

Life is ever-changing, fluid and challenging at times. Some of us cope better with closing chapters and starting new ones. Some of us cope better when things don’t go according to plan. Why?

Humour me for a moment as I talk about managing frazzled expectations using Miss Havisham from Charles Dickens’ classic novel, Great Expectations, as my muse! In this complex and intriguing tale, Dickens explores the contradictions of life – wealth and poverty, love and rejection and good and evil.
When I think about people challenged by change, a dramatic image of Miss Havisham sometimes pops into my head. For those that need some memory jogging, Miss Havisham is a central character in the novel – someone whose demise directly correlates with an inability to adapt to her circumstances.  She’s wearing the wedding dress she was jilted at the altar in, sitting in her run-down, rat-infested home surrounded by cobwebs. Miss Havisham is a person burdened by her past disappointments and unable to find a way out of her misery.

What Miss Havisham was missing was resilience – an attribute needed for weathering any storm. She was unable to re-script her story, and got stuck in a one-dimensional narrative of what her life should have been!

esilience is a buzz word in popular psychology at the moment (Sheryl Sandberg has written about it in her inspiring book Option B.). I cannot emphasise enough the power of resilience in supporting seamless transitions from one phase of life to the next.
If only Miss Havisham had known about resilience! If only she could have learned to embrace Option B.
Resilience is a mindset. And we can choose to cultivate it. It’s not a single skill or task to master, but a collection of thoughts, beliefs and approaches to life. By being resilient, we can better manage our expectations and live fulfilled lives even with natural ups and downs.

 Let’s start 2018 by taking things in our stride year in our stride?
Try and go with the flow
Relinquish the need to control – this incorporates both people and your environment. 

Take time to do the things you love and spend time with those you love
Read a book, meditate, giggle with friends, go for a swim, take a morning walk, listen to music and have that long-awaited dinner with your ‘bestie’. Self-care is vital for resilience.
Show empathy and kindness
Often the fastest way to take our mind off our own worries is by showing compassion for others. The age-worn mantra that “you have to give to receive” is so true.
Practice hypnosis and/or mindfulness
Everyone who knows me knows I’m passionate about hypnosis. Hypnosis and mindfulness free our minds from constant chatter, allowing us much-needed space to rest and recharge.
Acknowledge and accept our negative emotions
Research shows that allowing ourselves to feel sadness and anger instead of repressing it is important for mental health. This doesn’t mean that we need to wallow in our own negative emotions, but that we  should positively acknowledge and share our feelings with a sympathetic set of ears.Here is where therapy comes in. We should not underestimate the power of the “talking cure” . Dealing with our emotions is a critical part of healing and resilience development.
So, as the shutters open on on 2018, I wish us all love, health, luck and  resilience. 

Being a “Good Enough” kind of mother

Cinderella had a wicked step mother and a fairy godmother. My children will tell you that I can be both.

Thankfully I am far more fairy godmother, but when I’m screaming at them impatiently, being irritable and moody, unavailable or mean, I am like the wicked step mother.

With the stressors of modern life, in a world that is becoming increasingly more complex and confusing, I do at times fail to be an ideal parent. I’m sure you too, have had this experience. And like me, when this happens, you too, feel mortified. As a psychologist who has spent hours studying the effects of negative interactions, I know how damaging it is to scream and lose control. I know how negative experiences or comments stick to our brains like a leech.

Thankfully though, the moments when I become the wicked stepmother have been buffered by loving, caring and meaningful interactions. I like to believe that as long as we are 80 percent good, that is “good enough.” As Donald Winnicott, an English psychoanalyst who practiced in the 1950’s said, “mothers don’t need to be perfect, just ‘good enough.’”

What does good enough mean?

The good enough mother is sensitive to her child’s needs most of the time. She picks up what her child is trying to tell her and responds quickly to satisfy those needs most of the time. For instance, when her baby cries she will know if her baby is hungry, sleepy, uncomfortable, or just wanting attention—and will act with the appropriate response: feeding, putting to bed, changing a diaper, or picking up and holding. She may not get it right all the time but she does so most of the time. This sensitive and quick response builds trust; her child feels that he is well protected and safe in the world. Such trust is the basis of all love.

Sometimes bad is good. 

At times of course, the good enough mother, though she deeply loves her child, misreads his needs or fails to respond with immediate and unconditional urgency. She is, after all, human and at times struggles with impatience, anger and resentment, especially with older children. By the time they get to their teens—forget it! She is often frustrated with their behavior and attitudes and she does not always deal with the issues as gracefully as possible.

Is this failure to be sensitive bad? Not at all. In fact, a parent’s mini failures are actually considered crucial for a baby’s healthy development as they create opportunities for the infant to learn to self-sooth and develop coping skills for life. As they grow up, they realise that we are imperfect and don’t know everything. In fact they usually think the converse is true.

Psychologist John Gottman says we need five positive to one negative for a healthy, solid and good relationship. We get this not with the one big birthday party or outing with our children, but by accumulating lots and lots and lots of simple and pleasurable experiences. Your relationship with your children is like a money box: if you keep it in full (with positive interactions), the occasional withdrawal (negative interaction) won’t dent the box.

Repairing the damage:

What can we do to repair the damage after we’ve been “imperfect?”

>>> Saying “I’m sorry.”

 >>> Spending quality and quantity time with them.

>>> Telling them and showing them that we love them.

>>> Making certain that our positive interactions outweigh the negative to counteract the negative bias in our brains.

What we can do to stay “good enough?”

>>> Work on becoming mindful, well rested and nourished so that we can be calmer and more resilient.

>> Work on self-compassion and reminding ourselves that to err is to be human.

In summary, even the best parent is imperfect. We need to remind ourselves, that to raise a caring and resilient child doesn’t take perfection—it only takes only being good enough. Failing some of the time, but responding sensitively most of the time builds basic trust and a sense of security in our children. And that is good enough.


Photo: Tony Alter/Flickr


This article features on elephant journal –


New Year Resolutions

New Year’s Resolutions- Should we Bother?

Like many of you, I make New Year’s resolutions with zest and enthusiasm. For example, I will vow to use my gym membership more regularly, to lose weight, and to get more balance in my life… tick. tick tick…
And I every year I start off well but then, like most, I tend to resort back to my usual behaviour quickly.
This is typical. The University of Scranton research suggests that only about 8 % of people achieve their New Year’s goals.
So should we bother even making these resolutions at all?  Yes!
New Year’s resolutions are a sign of hope. They signify that we believe that we cannot only change but also be masters of our own fate to some degree.

When you face a challenging situation, do you feel that you have control over the outcome? Or do you believe that you are at the mercy of outside forces of which you have no control? If you believe that you have some control over what happens, then you have an internal locus of control and you take responsibility for your actions. If you believe that you have no control over what happens, you have an external locus of control and you feel more or less powerless to affect your circumstances.
As you have guessed, people with an internal locus of control tend to be happier, more confident and even healthier.
Which are you?

If you have an external locus of control, you likely feel learned helplessness, a term coined by Martin Seligman, an American Psychologist and educator.  Learned helplessness essentially means that you’ve learned that for the most part what you do doesn’t get you the outcome you wished for and so you give up taking action to change things.  It leads to and underlies depression.

You don’t have to live with learned helplessness.  Even someone in the worst imaginable circumstances, can find ways to change their outcome. Victor Frankl, an Austrian neurologist, psychiatrist and survivor of the Nazi concentration camp, is the supreme example. He explains:
Between stimulus and response there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom.
Everything can be taken from a man but one thing: the last of the human freedoms—to choose one’s attitude in any given set of circumstances, to choose one’s own way.”

When you make a New Year’s resolutions, even if you don’t stick to it, you are exhibiting optimism, the mindset that you can take action to change things for the better — whether it’s your football or soccer team winning, your article getting published, your business growing, making new friends, earning more money, or your new year’s resolutions succeeding. You are showing an internal locus of control.

So go ahead and make your resolutions!  Keep your hope and optimism alive. You may fail many times before you succeed. Thomas Edison experienced a 1000 unsuccessful attempts before he developed the light bulb.

RememberAnchor, as Henry Ford’s once quipped, “Whether you think you can or if you think you can’t, you are right!”

Happy New Year!

What is your life script?

Ever feel your history keeps repeating itself….

Let’s look at your life script.


FYI: Life script is a term coined by psychologist Eric Bernes, founder of transactional analysis, and famous for the concepts “I’m ok, you’re ok,” and games people play. Heard of him?

We see things in our lives through a certain lens. This lens acts as filter, filtering in certain people and experiences and filtering out others! The lens is our LIFE SCRIPT.

Sometimes we get stuck in a “nothing will ever change for me so why bother,” script. This happens when we feel that what we do makes no difference in getting us what we want.

To demonstrate, imagine a 5 gallon clear glass jar full of 500 houseflies free to fly around. Now put a piece of clear plastic wrap over the mouth of the jar and shake it up. No worries, there are approximately 48 hours of air in the jar for the flies. The flies will begin buzzing around the jar, banging into the sides, the bottom and the top. They can see the outside world but they can’t get to it. When researchers removed the plastic wrap less than 48 hours later, 99 percent of them stayed in the jar! Why? They have learned that no matter what they did, they could not get out so they stopped trying.

THIS HAPPENS TO US. Based on our life experiences, what people have told us and what we have told ourselves, we make decisions about what we can and cannot do. If those decisions are of no hope and futility, this becomes our life script.

WISE WORDS: As Henry Ford once put it, if you think you can or if you think you can’t, you are right!

Repetition Compulsion

It’s hard to break out of this cycle. Instead, we often make the same mistakes repeatedly. Neglected children often neglect others. People seek out difficult relationships over and over again. Freud spoke about this as the repetition compulsion. It is the tendency to do things over and over again in an attempt to get it right.

The End Is Written

Our scripts have a beginning, middle and end. If you are now living a life whereby you believe you are doomed never to get married, f0r instance, either because there is a shortage of the opposite sex around, or because you believe you are unlovable, then the end is written!

Subconscious Mind

The power to sabotage ourselves lies in the subconscious rather than conscious level. You may think you’d like to have a million dollars, meet the person of your dreams, or become successful in the business world. But if unconsciously you have accepted a script of poverty, rejection or failure that is all you will experience. You will destroy, unconsciously, anything that will take you away from that pattern or belief.

Conversely, if you believe that you are a pleasure to be with and deserve all that you ask for, you will act accordingly AND allow into your script winners and success.

Choose a Different Script

The good news is that because we chose our original script we can choose to change our old script and create a new, healthy, winning script to live by. Here is a man who did.

Alfred Nobel invented the modern form of dynamite long before he created the Nobel Prize award. His brother had died and due to a mix up by reporters, the area newspaper published his obituary. He was described as the man who invented dynamite so powerful that it could instantly reduce high buildings to debris. Nobel did not want to be remembered for such a destructive invention. So Alfred the philanthropist revised his life script. His will directed his fortunes to be used to establish a foundation that awarded a yearly Nobel Prize in the areas Physics, Chemistry, Physiology and Medicine, Literature, and Peace.

Alfred Nobel serendipitously read his obituary while still alive allowing him to see if he was happy in the direction that his life is going. What would happen if you did? Would you be happy with what you read or would you want a different life script?


  1. Take responsibility and change your behavior.

You can break these negative cycles. How? By changing the way you react. For instance, let’s say you fell into the trap of creating resolutions that can be reached only if others change first. For example, “I wouldn’t scream and yell at my son if he did his homework or took out the garbage,” or “I would be nice to my wife if she were more loving towards me,” or “I would have time to exercise if my boss wasn’t so demanding and I didn’t have to stay at work so late.” In this situation, you have a mindset that relinquishes personal control and responsibility, rendering change problematic.

Now switch this by changing how you react. If your son failed to do his homework, instead of flying off the handle, you counted to five and kept calm. With equanimity, you asked him why he didn’t do his homework. He said he didn’t understand it. You helped him out and he finished it and aced it. By taking responsibility for your emotions, you changed your script.

WISE WORDS: George Bernard Shaw has beautifully captured the power we have to shape our attitudes and behaviors. Said Shaw, “People are always blaming their circumstances for what they are. I don’t believe in circumstances. The people who get on in this world are the people who get up and look for the circumstances they want, and, if they can’t find them, make them.”


More than 2000 years ago Socrates discovered the laws of effect. When we repeat the cause we get the same effect! If you are not happy, don’t keep doing same thing. Rather, change the cause to get the effect you want even if this means feeling uncomfortable!

Change represents venturing into unchartered waters. We are all fearful of leaving our “comfort zone,” even when this so-called comfort zone is anything but comforting. Although we consciously wish to change, our self-defeating actions reflect the anxiety of giving up the known for the unknown. Some people would rather remain in a job or a relationship that brings little joy or satisfaction than risk of moving into a situation that they fear may lead to more stress rather than exciting opportunities. They are imprisoned by self-doubt and fear that lessens the possibility of creating new, invigorating scripts for their lives.

And now you have to ask yourself, “Can I really change my life script? Am I really author of my life or I am determined by my destiny and harsh environment?” If you think you have no control, then this is your script. Change it! Every seer from Jesus Christ to Buddha believed that we make our own reality. You too can make yours!

By Lynne Woolfson copyright@2015


Fears are natural and actually keep us safe. They can stop us from acting too dangerously or recklessly. However, fears can at times be debilitating and that’s when they become problematic.

As a child, were you afraid of the shadows in the closet? Or scared of lightning and thunder? Did you think that there were creatures under your bed?

In childhood fears are completely normal. They arise at certain times in development and tend to diffuse in intensity as the child ages. The three-year old who is afraid of the dark and must sleep with a light on may enjoy a slumber party in the dark at age 10. The four year old who thinks clowns are scary may love magicians as a teenager. The child who hates injections may become a nurse or a doctor as an adult.

Here are typical fears by age:

  • Babies are afraid of loud noises, large objects and experience stranger anxiety, clinging to parents when faced with a new person. At around 10 to 18 months, toddlers experience separation anxiety and become distressed when the parent leaves.
  • Kids ages 3 through 6 fear imaginary things like monsters, ghosts, and supernatural beings, as well as the dark, noises, sleeping alone, thunder, floods and anything else scary that could harm them.
  • Kids ages 7 through 16 often have more realistic fears like getting injured, getting sick, losing a loved one, failing a test, dying from an accident, or natural events like floods, hurricanes and earthquakes.

What can you do as parent to help allay your child’s fears?

  • Don’t tell your child that he is crazy .   To your child, the fears are real. Talk about the fear with your child and let him know that you are there to protect him from any harm. Use fluffy dolls and tell your child that these dolls will protect him. Dream catchers are good to use for when your child has bad dreams. Telling stories about how you used certain dolls or toys to overcome your fears when you were a child help too.
  • At the same time, don’t cater to fears. If your child is afraid of dogs, for example, don’t avoid going to a friend’s house who has a dog. If your child becomes afraid, keep her close to you to provide support so she feels protected. Teach her coping strategies. Using you as a safe home base, see if she will allow the dog closer and even pet it. Point out how gentle the dog is with other children. Teach her positive self-talk. For instance, “I can pet Max. I can do it. I am safe. He won’t hurt me. I will be okay.” Teach him how to use his imagination to allay his fears. For instance, if he becomes terrified of the friend’s dog, encourage him to put the fear inside a balloon and burst it, or put it on a cloud and watch it float away.
  • Some children seem relatively fearless while more sensitive children will be more fearful and need more parent support.
  • If you are a parent of an empath, your child will be highly sensitive, and might fear clowns, get startled easily, have separation anxiety, get distressed by changes in the weather, especially storms, in fact your precious one will have many fears, as she is easily picking up the energy around her and you will have to be especially caring and nurturing with her.


If you have a child who has fears. “Taking a C.A.B. to Happy land : Help your child to relax and discard their negative thoughts” is a great resource for you.

You can find it on amazon at

Or on my website

copyright 2015@lynne woolfson

What Is an Empath?

Are you:
• Emotionally sensitive
• Moody (four seasons in a day)
• Intuitive
• Prone to feeling tired or drained

Do you have:
• Loose personal boundaries and allow others to drain you
• Heightened senses (sound, touch, light, scent, taste, movement)
• GI issues, food intolerances or allergies

If so, you are likely an empath.

What is an Empath?

There are an increasing number of people who are identifying with the term “empath”. It is an umbrella term used to describe extremely sensitive and intuitive people. An empath has their pulse on how other people feel and can perceive different dimensions of the world .In other words, the empath has the ability to understand and share another person’s experiences and emotions, as if they were his own.
Being an Empath Can Have Its Downside
Being in touch with the other’s feelings means you are a good listener, kind, intuitive and compassionate. But easily picking up another’s energy has its downside. You get easily distressed if the other feels sad, annoyed, angry or frustrated and you too begin to have similar feelings. You are also a target for drainers – people with negative energy who can suction up your good, healing energy.
Some of the Empath’s Characteristics
• Acute senses: smell, taste, sight, touch, hearing
• Acute awareness of other’s feelings and able to feel deeply for those in pain or suffering
• Easily hurt
• Avoids conflict preferring to keep things harmonious
• Easily startled
• Easily moved to tears
• Sensitive to changes in weather
• Perceptive to other peoples moods
• Dislikes being in crowded situations
• Engenders trust in people who easily open up to them
• Attracts animals and children
• Perceives with the heart
• Nurturing and caring
• Resonates strongly with music, harmony and creativity


In my book, THE LIFE OF AN EMPATH: Towards hope I will teach you all the ways to allow your extraordinary specialness to work for you, not against you.

copyright 2015@ Lynne Woolfson