How To Change Your Beliefs About Wealth

Dr. Heather Kappes | Associate Professor | Researcher


Dr. Heather Kappes explains how beliefs and meaning influence spending and wealth. She discusses why high-income earners often live paycheck to paycheck due to social pressures and the importance of understanding the meaning behind spending for better self-control. She also highlights the role of scarcity in spending decisions.

The conversation touches on the beliefs of the FIRE (Financial Independence, Retire Early) community, how children form beliefs about spending and the impact of social pressure. Key themes include the relationship between spending and happiness, financial literacy, and cultural differences in spending attitudes.


  • The “spending implies wealth” belief can lead to financial vulnerability.
  • High-income earners often live paycheck to paycheck due to social pressures and spending beliefs.
  • Understanding the meaning behind spending is key to behaviour change and self-control.
  • Scarcity impacts spending decisions and complicates consumption smoothing.
  • The FIRE community’s beliefs on saving and spending can improve financial habits.
  • Spending does not necessarily lead to happiness or indicate wealth.
  • Younger children often equate spending with happiness, while older children develop a nuanced view.
  • Parents can foster healthy spending habits in children through discussions about money, teaching opportunity costs, and encouraging saving goals.
  • Financial literacy programs should address social and psychological factors influencing spending, beyond basic concepts.


  • “Living life at the time that you have it.”
  • “Spending implies that you have money, that you have wealth.”
  • “I think it’s natural for kids to feel disappointed when we say, ‘We’re not spending right now.'”
  • “It’s not just like abstractly saving, but it’s saving for some kind of goal.”


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