Does this story sound familiar?
Amanda was determined to spend more responsibly, and especially to stop using her credit card so much. Time and again, she set a firm plan, and over the coming weeks, sometimes even managing for months, she would seriously curb her spending. But inevitably, one day she would succumb to an irresistible temptation and feel like she had ended up right back where she started. Most often things went something like this: Amanda would turn down invitations out for lunch, she would walk on past John Fleuvog’s on Queen Street, and she would content herself with dvd’s at home (after all, hadn’t she bought the Blu-Ray in order to do precisely that?). Then one day when she was perhaps a little tired, or maybe lonely, she would finally say Yes, and out would come the credit card. And having finally broken the strict regimen, she would then go the distance – go out for lunch with friends, then pop into the nearby shop and top it off with late afternoon drinks. $300 gone.
There was always an immediate rush of gratification, but pretty quickly discouragement would set in.
“I’m in debt. Again”. And then she would blame herself. “I have no self-discipline!”.
Chip and Dan Heath, in their latest book “Switch: How to change things when change is hard” have a useful lens through which to understand what just happened.
We are not a sane species! In fact, we are downright schizophrenic. Our minds have two systems at work at the same time, all the time.
One part of our brain is rational. This is the part of us capable of long-term planning, analysis and delayed gratification for the greater good.
The other part of our brain is instinctive. It is, every moment, acutely aware of whether we are experiencing pain or pleasure.
Our rational side provides us with direction. Our instinctive side provides us the energy to get things done. When these two parts of our brain work together, change happens. But when our rational mind is at odds with our instinctive mind, the rational mind will lose. Every time.
When Amanda was faced with a strong enough temptation that put her instinctive, short-term mind into conflict with her rational mind she pulled out her credit card.
This does not mean she is un-self-disciplined.
It does not mean she has an unconscious desire to sabotage herself.
It does not mean she is lousy with money.
She simply found herself in a situation that put her two systems in conflict.
This is the first thing you need to know about changing your money habits. Long-term success requires an awareness of these two parts of your brain, and finding ways to work with both the rational and the instinctive parts. Over the coming mid-week and weekends, I’ll be posting on how to do precisely this.