alter. We are averse to change, and, when it comes to spending habits, we are stuck in our ways.
We need to replace existing routines with new routines, to change our habits slowly. For example, if being paid is a cue that signals spending, and your existing pattern is to pay your bills and then buy everything you want and, finally, to save, change your pattern to saving a portion of what remains after your expenses, and only then spending on non-essentials.
One way to change entrenched patterns, according to some psychologists, is through “if-then” planning. This is a great way to resist temptation and build good habits, because it commits us to specific actions. For example, “If I get paid a bonus, then I will make an additional contribution to my investment.”
According to research, we are two to three times more likely to succeed in changing our habits if we use an if-then plan than if we merely state a goal such as “spend less, save more”. Psychologists explain that if-then plans work well because they speak the language of our brain: the language of contingencies. Deciding exactly when and where you will act on your goal creates a link in your brain between the situation or cue (the “if ”) and the behaviour that should follow (the “then”).
If-then plans have been found to be less demanding and require less willpower than simple resolutions.
We are our own worst enemies – our self-doubt gets in the way of us achieving our goals. If you don’t really believe you can achieve something, you are developing an internal feedback loop that will prevent it from happening. If you want your brain to believe you can do it, you need to believe that what you are doing is worthwhile.
Jeanette Marais is the director of distribution and client service at Allan Gray. This article, which appeared in the November 2017 edition of Allan Gray’s newsletter GrayIssue, is used with permission.