One: What looks like a people problem is often a situation problem.
Everyone has some bad habits when it comes to spending money.
But changing a bad habit like buying shoes you wear once, is hard to change.
Changing the situation or the environment is easier.
1. Walk a different path to avoid shoe shops.
2. Stop visiting websites that sell shoes.
3. Tell yourself that if you want to buy another pair of shoes you have to throw out, donate, or sell a pair you have at home to make room.
“Everyone has a plan until they get punched in the face.” - Mike Tyson
When you are trying to save money, changing your mindset to stop yourself from spending is too emotional of a decision. Most people will not be able to hang on to their rational plan when they are in the moment.
In the moment, your emotions want instant gratification.
In the book Switch by Chip and Dan Heath, they call your emotional side, the Elephant. And your rational side is the (elephant) Rider. The Rider holds the reins, and seems to be the leader. But the Rider’s control is precarious because the Rider is so small relative to the Elephant. Anytime the six-ton Elephant and the Rider disagree about which direction to go, the Rider is going to lose. He’s completely overmatched.
You are likely familiar with the situation where your Elephant (emotional side) overpowers your Rider (rational side).
You’re at the grocery store and buy 3 bags of chips, 2 buckets of ice cream, and a few boxes of cookies. Or you’re window shopping at the mall and end up with a bag of clothes in each hand when you leave. It happens to even the best of us.
We spend unnecessarily and spontaneously when we know we shouldn’t. As the Heath brothers’ put it, “it’s lazy, skittish, often looking for a quick payoff over the long-term payoff.”
How can we instead focus on the long-term payoff?
Change often fails because we cannot keep the Elephant on the road long enough to reach the destination.
Early Retirement comes from saving consistently, every day, every week, every year, for several years.
Self-control or self-supervision is an exhaustible resource.
When we are trying to control a bad habit we are using our self-control.
Changing a bad habit, or a habit that has become automatic requires careful attention and self-supervision.
The bigger the change you’re suggesting, the more it will sap your self-control. With your self-control exhausted, persisting in the face of frustration is sure to fail.
But the Elephant is not the bad guy here. The Rider is equally at fault.
The Rider can tend to overanalyze and end up doing nothing. This is the person that plans and plans and plans but never follows through.
How many times have you planned to save, but ended up forgetting or stopping?
You need your Elephant to bring passion, love, and energy, to get things done.
Getting your Elephant and Rider in sync will help you drive change more easily.
TWO: What looks like laziness is often exhaustion.
This exhaustion of trying to save every day on every potential decision and transaction can be exhausting to the point where by the end of the week you just let spending get the better of you and you “splurge”.
While I believe you should splurge once in a while, splurging outside your limits can get you into credit card debt or dig into your hard earned savings, setting you back months or years.
So how do you get the Elephant and Rider on the same page?
You need to break through to your feelings. If you can appeal to the emotional side it will take control and make it so.
Figuring out WHY you want to save will help align your motivation with your Rider.
When you emotionally want the same thing as you rationally want, change is easy.
THREE: What looks like resistance is often mistaken for a lack of clarity.
If you want to change, you must have crystal-clear directions.
2. Prioritizing what you want to spend on and enjoy those things but not others. Spend intentionally.
You already know saving is good, you already know saving is necessary to retire.
Find your motivation to save by choosing to retire early, and not just a couple years early, but maybe even a couple decades early.
And if you don’t know where to start when it comes to saving and setting up your life efficiently.
Check out these articles for EVERYDAY tricks to save more.
Save Money Retire Early is written by Jon Lo, a barely 30 something change optimist, and personal finance guy. I believe anyone can be rich or poor, it's what you save that makes the difference.