What are beliefs, and how do they form?

This educational content is part of Week 3 of the Money Story Rewrite, a 4-week journey to uncover the motivations, memories and beliefs that drive our relationship with money, and to shift our money story through small, deliberate actions.

What are beliefs?

A belief is a mental shortcut - a pattern we’ve learned through experience that helps us predict what’s true, safe, or expected in a given situation.

Beliefs help us navigate complexity by reducing uncertainty. They emerge because the brain needs efficient ways to interpret what’s happening and how to respond. This process is cognitive, in that it helps us organize information and make decisions; it’s also social, in how we learn what’s acceptable in a group; and emotional, because beliefs often take shape through charged or memorable moments.

This is especially true for beliefs formed early in life, when we’re first making sense of what’s normal, what’s allowed, and where we stand in the systems around us.

How do beliefs form?

From a behavioral science perspective, beliefs develop through repeated associations between events, emotions, and outcomes. These associations are often context-specific at first, but over time, they generalize into broader expectations about how the world works and how people like us are supposed to behave in it.

Some of those associations form through direct experience:

• a parent sighing audibly when a credit card is declined

• a friend being teased for wanting something expensive

• a teacher praising a student for saving their allowance.

Others are absorbed indirectly - through overheard stories, changes in tone, facial expressions, or body language. These cues don’t need to be consistent or even verbal to leave an impression. The brain encodes patterns quickly, especially when those patterns carry emotional weight or social consequences.

What Purpose Do Beliefs Serve?

Beliefs often function as internal rules that help us avoid harm, seek approval, or maintain connection.

A child who watches money-related tension escalate into conflict may begin to avoid bringing up financial needs, forming a belief that talking about money causes problems.

A teenager who sees that ambition is celebrated in their community may develop the belief that success is central to identity. These beliefs don’t require formal instruction. They’re shaped by what’s repeated, what’s emotionally salient, and what feels required to stay safe or connected.

Over time, beliefs become embedded in how we interpret situations. They guide where we focus our attention, how we explain what’s happening, and what choices feel available to us. Once a belief is in place, the brain tends to look for information that confirms it. This tendency, known as confirmation bias, helps preserve consistency but also limits flexibility. It’s one reason why beliefs can persist long after the original circumstances that formed them have changed.

How Do Beliefs Persist?

Beliefs are often maintained through behavior. We act in ways that align with what we expect, and those actions generate outcomes that reinforce the original belief. For example, someone who believes they’re not good with money may avoid looking at their finances, which leads to feeling even less competent or prepared. That feeling then becomes further evidence that the belief is true.

Why Are Money Beliefs Especially Sticky?

Money beliefs in particular are often deeply layered because of the kinds of emotional and social triggers they intersect with. Financial decisions and experiences frequently tie into questions of safety, survival, identity, and belonging, domains where the stakes feel especially high. A person who grew up in a household where spending led to conflict may associate money with danger or shame. Someone whose culture emphasizes communal responsibility may carry beliefs about obligation or sacrifice that shape their financial choices. In competitive environments, money can become linked to worth or status, reinforcing beliefs about needing to outperform others in order to matter.

These kinds of beliefs don’t just shape individual behavior. They influence relationships, professional decisions, self-perception, and the thresholds of what feels “normal.” Because they were often formed in emotionally charged contexts, they can feel especially rigid, even when they’re no longer relevant or helpful.

Why Does Awareness Matter?

Understanding how beliefs form doesn’t automatically change them. But it can create the conditions for change by making space to observe them — not just as personal truths, but as patterns shaped by specific contexts, relationships, and needs. This kind of reflection isn’t about blame or analysis. It’s about becoming aware of the structures that influence what we see, what we expect, and what we allow — so that those structures can eventually be re-evaluated.

Beliefs are not permanent. But they are often persistent, especially when they’ve helped us adapt. By recognizing how they formed — through repetition, emotion, and social context — we begin to understand why they feel so convincing, and where there may be room to create something different.