How our brains stop us sav­ing


TWO out of three Aus­tralians pro­cras­ti­nate about mak­ing fi­nan­cial de­ci­sions, re­search has found.

And while pro­cras­ti­nat­ing can dam­age our fi­nan­cial fu­ture, our brains ac­tu­ally feel good about it, which makes the is­sue harder to tackle.

A Sun­corp study has dis­cov­ered that two-thirds of peo­ple pro­cras­ti­nate about money, typ­i­cally around es­tab­lish­ing a bud­get, set­ting up a sav­ings plan or pri­ori­tis­ing spend­ing into needs and wants.

Sun­corp be­havioural econ­o­mist Philip Slade said peo­ple un­der­es­ti­mated the im­pact of emo­tions on their fi­nan­cial de­ci­sions. “Even just look­ing at our fi­nances brings up a range of feel­ings – re­gret, dis­ap­point­ment and even fear.,” he said.

“As our brains are hard wired to avoid pain, we be­come nat­u­rally re­sis­tant to any money-re­lated tasks. Aus­tralians in gen­eral tend to take a laid-back ap­proach to most things, in­clud­ing fi­nances, un­til things get out of hand and then we panic.”

Mr Slade said tac­tics to beat pro­cras­ti­na­tion in­cluded set­ting dead­lines and telling peo­ple what they were go­ing to do.

“Don’t beat your­self up when things don’t go to plan. It’s not about not pro­cras­ti­nat­ing, it’s about pro­cras­ti­nat­ing less.”

Wealth for Life Fi­nan­cial Plan­ning prin­ci­pal Rex Whit­ford said pro­cras­ti­na­tion was a big prob­lem, and he tried to live by a “five-sec­ond rule” when a valu­able thought popped into his head.

“If you don’t think about do­ing it in the next five sec­onds, it’s not go­ing to hap­pen be­cause your brain will sab­o­tage you,” he said.

This meant that peo­ple should start mov­ing in the right fi­nan­cial di­rec­tion im­me­di­ately, not to­mor­row or the next day, Mr Whit­ford said. “Other­wise noth­ing will hap­pen and they get to age 65 still won­der­ing what to do with their money, if they have got any left.

“The great­est as­set that some­one has is time. Pro­cras­ti­na­tion is a time thief, which makes it an op­por­tu­nity thief.”

Sun­corp’s ex­ec­u­tive gen­eral man­ager of stores and spe­cialty bank­ing, Lynne Suther­land, said peo­ple should for­get about their past pro­cras­ti­na­tion prob­lems and fo­cus on pos­i­tive fu­ture changes.

“The longer peo­ple pro­cras­ti­nate about get­ting their fi­nances in or­der, the more time and op­por­tu­ni­ties are lost to save a few ex­tra dol­lars,” she said.

“It can also hin­der our op­tions to ben­e­fit from a sale or dis­count be­cause we’ve left mak­ing a book­ing or pay­ing a bill to the last minute”.

Ms Suther­land said money could be con­fus­ing and set­ting goals over­whelm­ing, so peo­ple should ask for help if needed.


DON’T PUT IT OFF: Sun­corp be­havioural econ­o­mist Phil Slade.

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