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Why We Can’t Save Money with Just Willpower

Posted by Carrie Rattle on Jan 8, 2015 2:12:00 PM

How many times have you been disappointed in yourself because at the end of the month, you didn’t save your targeted amount? Well now is the time to stop blaming YOU, and realize the issue is harder to tackle than we think.

Saying No is Hard Work

Willpower means saying NO, multiple times a day, a week, or a month. Have you ever noticed that when you just browse online for items, they keep showing up in ads on other sites you visit? Web sites are using cookie tracking to their advantage, and they follow you as you surf the net. Each time you see the item, it becomes more difficult to say no and save money.Saying no is a conscious decision that takes a lot of energy. Changing your subconscious habits instead may be work in the beginning, but eventually the new behaviors become automatic. You can eventually achieve success and save money with less energy.

The Power of Habit  The_Habit_Loop-278651-edited

Habits are automatic, subconscious behaviors that you have developed throughout the years. MIT researchers discovered the habit loop during an experiment and define it as CUE > ROUTINE > REWARD. Let’s explore a non-monetary example – responding to email.

 1) The Cue, or Trigger, is why you are receptive at that moment and willing to interrupt what you were doing.  You might be bored, socially uncomfortable in a situation, or stuck on a problem. It could just be the time of day. The “ding” or chime announcing a new email gives you a reason to be distracted.

2) The Routine or Action might be to change screens or pick up your smart phone and read the email, or even respond. It is the habit you want to change.

3) The Reward is the gratification you receive from responding to the email “ding”. The email might make you feel valued if it is from a boss or friend; give you a mental break from some tough work; or give you an excuse to exit what you were doing in the first place.

Find One Small Habit Loop of Your Own

Triggers, Actions and Rewards are unique to each person. Try to identify one of your own habits as an exercise. It doesn’t have to be about money yet – perhaps it’s your coffee routine every morning. Try to dissect it into your Trigger, Action, and Reward. We’ll talk more about this in our next blog.

This blog is helpful for all money behavior profiles.

Get My Money Habits

Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. Behavioral Cents, LLC and any third parties listed, linked to or otherwise appearing in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies.

 Carrie Rattle is a Principal at BehavioralCents.com, a web site for women focused on the mind and money behaviors. She has worked in the financial services industry for 20+ years and hopes to inspire women to better prepare themselves for financial independence. Thoughts always welcome: carrierattle@behavioralcents.com.

 

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