The most common reset needed is over debt. Being in debt isn't as inevitable as some people think. There's a lot going on in the deepest darkest recesses of our brains that keeps some people in debt more than their economic situation, says money coach Jill Porter of Financial Clarity.
"Many of my clients see themselves as unworthy of having money [savings] so spend it as fast, and more often faster, than it comes in," Porter says. "They also equate possessions as esteem boosters so will buy 'stuff' to make them feel better."
Rob Collins, general manager of the NZCU Auckland credit union, says to become a saver from a spender or non-saver you need to start by being honest with yourself. "What is your actual financial position and how much do you want to fix it, assuming you believe it's broken?" says Collins, whose organisation provides budgeting advice to thousands of Kiwis.
"How desperate are you for that first home, new car, overseas holiday or whatever. That determines how much you are prepared to change and if sacrifice is necessary, how much of a sacrifice you are prepared to make. Will you really buy house brands rather than label products or Lion Red rather than Steinlager?"
He advises reciting the saying of Star Wars' Yoda: "Try not. Do or do not. There is no try." Once you've worked this out in your head the rest is just a matter of doing.
Financial planner Duncan Balmer of Balmer, Jeffs & Company believes we need a mental reset about the likely rate of house price appreciation in the next few decades. "Our expectations of the returns from all forms of investment [bank deposits included] must necessarily be lower than they have been."
The 30 years from 1980 were remarkable in terms of returns, but Balmer doesn't believe these years will be repeated thanks to the colossal fall in inflation and corresponding interest rates.
"What is more," Balmer says, "given that shares, houses and farms are much more expensive than they were 30 years ago - expensive relative to the incomes they can produce - the next 30 years are not likely to produce the same sorts of returns in any case, even putting aside the influence of low interest rates, inflation and growth."
Also in need of a reset is the idea that it's impossible to buy a first home. Nearly 13,000 Kiwis bought their first homes with KiwiSaver in the past year, a sure-fire sign that it's not impossible. "It's not the fact that [first time buyers] can't buy a house in Auckland," Porter says. "It's that they can't afford the house they want in the area they want.
"Instant credit to quite high levels, as well as parental indulgence, has taught them that they don't have to save for anything. They can have whatever they want, when they want." If they can't have the house now, they blame others.
Whatever the mindset problem, the reset needs what are called brain "hacks" in popular vernacular. It's about getting one-up on the innermost workings of your grey matter.
Psychological cravings, for example, come thanks to the gratification chemical dopamine, which floods into our brain just when our wallet doesn't need it.
There is a whole science behind overcoming these cravings. We can, for example, create new rewards. When you feel the craving, you have another reward lined up. If you love the beach and the mall, when you get a craving to go to the mall, get your togs on and have a long swim instead.
One common hack is to have pictures on your wall or smartphone screen depicting a positive goal. If you feel a craving to do or buy something you don't want, take a long hard look at the picture and imagine yourself doing what it depicts.
Another brain hack that is useful for the mindset reboot is using affirmations. I once read a book called Positive Thinking by Vera Peiffer. One of the book's messages was to train your mind by repeating positive affirmations, over and over again. "I can buy a house." "I can save for my retirement." And so on.
Then there's the Peter Pan effect. Remember the line from Peter Pan as he attempts to save Tinker Bell's life: "I do believe in fairies. I do, I do," he repeats. It may be fiction, but the process is the same if you want to reset your mind.
Collins is a fan of the Peter Pan quote as well and adds: "If you 'do believe in saving' you will."
Resetting your brain isn't always about spending less. There are many different resets we need. Some people need to take more risk to be better off, and that might even mean spending more money to upskill or start a business. Others require the opposite. They can't take measured decisions when it comes to risk and end up losing it all - or a big chunk.
Then, as Porter points out, there are plenty of people who are well off but live impoverished lives.
I found myself in the situation recently where I realised I needed a mindset reset. Faced with the choice of waiting for a minor medical procedure, or paying around $400 to get it over and done with, I found myself looking for excuses to delay and get it done for free.
The logic breakdown there is that I consciously chose not to spend $100 or so a month on health insurance in the knowledge that I could use the savings when they were needed.
Other skewed thinking relates to banking. Banking Ombudsman Deborah Battell says two major resets in thinking she believes we need are: No1: Get out of the idea that the bank is there to save us from ourselves and No2: Investing money - even through the bank - is risk-free.
In the first instance there are many cases of people blaming the bank for not picking up on a scam or deal gone wrong. "It is the person who gives the bank the instruction. It is not up to the bank to determine whether this is a fraudulent transaction," Battell says.
Then there are those people who believe bank investments are risk-free and customers should be reimbursed if there is a loss. Investments sold by banks such as managed funds and bonds can lose money.
The Financial Markets Authority (FMA) would like to see KiwiSavers think of themselves as investors - because that is what they are. They need to take ownership of their investment, says Simone Robbers of the FMA, and ask how and where their money is invested.
Another idea I'd like to see reset is that it's okay to rip off insurers. It's not okay to inflate an insurance claim because the insurance company has lots of money, or to fabricate it completely. We all pay through higher premiums and often the fraudulent customer finds out the hard way that they can't outsmart the insurance company and its trained investigators.
