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.