In the modern world of social media and targeted advertising, the yearning for instant gratification has never been higher. Why put money into an emergency fund or to pay for a will and powers of attorney when you can have a shiny thing to take a picture of for all your online acquaintances to heart over. The shiny thing leads to acceptance from people who typically don’t matter to us in our everyday lives, but buying more shiny things means we get more hearts and more acceptance. On and on again the behaviour continues.
Our financial behaviours are directly correlated to our motivations. Delayed gratification is hard. Many people in today’s world can’t work towards a goal that’s only a few years in the future, let alone decades into the future. If our goal is to have all the things now, our financial behaviours will follow that goal. If our goal is to retire early, our financial behaviours will instead follow that goal.
I’ve spoken with many retirees or people nearing retirement, who have that one motivation top of mind: to live a good life for the rest of their life without having to worry about money. As a result, it’s easy for them to cook dinner at home together than to order takeout or go to a restaurant. Their food tastes better because one meal of one day cost them $24 instead of the delivery order that cost $76 plus tip. Multiply that over every meal of every day and we’re talking real cash now.
“If you want to get out of debt, you must get more enjoyment out of saving your money than you do spending your money.” – Suze Orman
People who constantly carry high credit card balances and live paycheque to paycheque fall into the trap of spending money on things because they want the pump of endorphins that we get when we buy something new. In reality, studies have been done on this behaviour and have discovered we get the same endorphin pump from shopping for and telling ourselves we bought the thing we want to buy than we do when we actually buy it. In short, you can get the same endorphin hit in your brain by looking at something online that you would like to buy and then closing your browser than you would by actually completing the purchase. You feel the same way without spending any of your money!
If you look at your bank balance at the end of the month only to find it nearly at zero (or less than zero and into overdraft) and your credit card balance at significantly more than zero and that image brings you nothing but stress and anxiety, it’s time to embrace your “enough is enough” moment. Your financial behaviours will automatically follow your motivation and deciding what your motivation is comes down to answering one simple question: Is what I’m doing making me happy or not?
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