How To Outsmart Bad Money HabitsDrawing on key insights from world-renowned psychologists and economists, this article sheds light on how all of us can manage money better
IntroductionIt’s all well and good painting a picture of what your future finances will look like if you allocate this much money to supplier costs, or that much cash to your monthly petrol budget; but seeing as we can’t actually tell what the future holds, we have to prepare for all possible outcomes (in other words, we need to expect the unexpected).
Bill Murray does an excellent job in emphasising the importance of preparation in the 2015 film Aloha, where his character states “the future is not something that happens; it’s a brutal force with a great sense of humour that will steamroll you if you’re not watching”1.
With that in mind, here are some tips on how you can outsmart yourself when it comes to bad money habits.
#1 Plan for Procrastination68% of people say they should save more for retirement, with the key word being should 2. One main culprit responsible for the discrepancy between ‘should’ and ‘do’ is procrastination. As David McRaney explains in You Are Not So Smart, “procrastination is all about choosing want over should because you don’t have a plan for those times when you can expect to be tempted”3. Whether it’s money, dieting or your TV shows watch list, we’re all guilty in some way or another for planning to do one thing, and then doing something else when the time comes.