Everything that makes up your personhood — your values, experiences and culture — directly affects your spending habits more than you might think.  

“Financial psychology is about the humanness of money: how people think, feel, behave about their money [and] their relationship with money in the past, present and future,” said financial psychologist Preston D. Cherry, who is also a certified financial planner and founder and president of Concurrent Financial Planning in Green Bay, Wisconsin.

Who you are contributes to what your money is doing and where your money is going, says Cherry, who is a member of CNBC’s Financial Advisor Council. Certain forms of social conditioning, such as budgeting, also come into play in people’s spending habits.

Budgets help address maladaptive financial behavior or areas where you need control, such as overspending or spending leakages. However, they are restrictive by nature, he said.

“Psychologically, ‘budgets’ sound restrictive. ‘Spending plans’ sound a lot better — they give a lot more freedom and flexibility,” he said.

Spending plans act as a sort of “reverse budgeting,” where you can save and invest for your future while affording the opportunity to enjoy life in the present.

“It’s about giving yourself permission to start the life stage that you’re in and then go on to the next one,” said Cherry.

To boost financial wellness, Cherry calls on people to be intentional and aware of their money thoughts and actions through what he calls his “6-A Alignment System.”

The first three As are about taking stock and setting your intention:

1. Admit where you are in your journey. Jump-start your financial journey by being honest with yourself on where you are standing. “Everybody’s journey is personal and unique to them, like a thumbprint,” he said.
2. Acknowledge how you feel about it. Recognize your emotions about where you are with grace and compassion.
3. Take action into your life. At this stage, you switch your energy toward your goals and “move forward with a vision, your life design,” Cherry said.

“Then there’s the next three As: align, aspire and achieve,” he continued. “Aligning your life’s desires, aspire to do those things and then go on about achieving them.

“It’s a process,” Cherry said.

Financial compassion pays off over time, he said.

“You start with financial compassion. Once you’ve done this process, you can go into financial education,” he said. “Then you have financial literacy, which are informed behaviors and decisions.”

“All because you gave yourself financial compassion, you get to this state of balance, which is letting your life lead your money, not your money leading your life.”