You may be wondering why you can’t save or control costs, despite constant efforts. The main rule of money management in theory sounds simple: earn more and spend less. But in practice, this is not so. The human brain, based on experience and knowledge gained, often does not allow to get rid of monetary difficulties.
Below we will talk about the main problems and how our financial thinking works..
Scarce (scarce) financial thinking
In psychology, this term refers to a person’s life orientation toward a lack of resources. When it comes to money, this is the case when we constantly feel that finance is not enough. The brain hardly calculates the time to solve monetary problems and tries to simply dismantle the existing difficulties. A person with this style of thinking either commits a lot of impulsive actions, because he believes that he has nothing to lose, or does nothing to improve his condition, while simultaneously complaining about a lack of money. As a result, useful investments have not been made, and loans are growing at a tremendous speed..
The feeling of constant financial deprivation does not allow you to make the right decisions. A person ceases to rejoice in the world, because he does not believe that he has enough strength and money for a good life, or, on the contrary, litter means, filling the void within himself. Of course, you can’t get rid of deficient thinking in one day, but you can try to focus on what you have already achieved. Record your activities, goals and dreams, to see what you are striving for.
Misunderstanding the reasons for their own expenses
Each of us treats money in a special way, forming financial values throughout life. However, any person has the so-called psychological hooks. These are the places, circumstances, people, feelings and emotions that provoke us to spend money more than usual. For example, even if you have financial problems, you can go to your favorite store and go shopping because you are sad or tired.
First you just have to admit to yourself that such triggers are really there is in your life. Think about what motivates you to spend beyond measure, and write down all ideas in this regard. Try to change your behavior, avoiding situations in which costs increase very quickly.
Preservation of the monetary status quo
In jurisprudence, by this word is understood a return to the initial state. In relation to human values and lifestyle, such a term is also relevant. The fact is that as one grows up, a person becomes more and more attached to his environment, be it work or friends, as well as his own achievements in specific areas. Unfortunately, for monetary success, such habits are harmful.
To significantly improve your financial thinking and life, you need to transform certain aspects of life. Regardless of whether you pay for debt or a mortgage, achieving monetary goals means making major changes in behavior. And that’s exactly what most people don’t want to do, in accordance with the prejudice of the status quo.
The bias in the status quo is a distortion of our thinking. People adhere to the old, strive for immutability and stability. They take on faith everything that parents, friends or society as a whole say. But, if you really want to achieve some major goals, you can’t act as usual every time when fate gives chances. Change your mentality, get out of your comfort zone, and you will be able to say goodbye to debts and increase income.
Inertia vital movement keeps you from success. The effect of the status quo can be destroyed only by changing the usual daily affairs and things. Yes, it will be inconvenient for your life at first, but it is worth it.
Stuffing the head in the sand (the effect of a hidden ostrich)
Everyone strives for pleasure and instinctively avoids trouble.
In the monetary sphere, everything works the same way. Researchers have found that investors are moving away from negative information and risky situations. This pattern of financial behavior is called the ostrich effect: people simply refuse to acknowledge the existence of monetary problems. These features of life are applicable, of course, not only to investors. For example, a person postpones opening a contribution or investment in assets, going to a tax or pension fund, because it is too difficult and scary.
To overcome the effect of an ostrich, meet with financial problems face to face. Constantly avoiding difficulties, hoping for their magical disappearance – means creating new troubles. And, as practice shows, fresh problems are always larger and more pitiable than the former. Therefore, do not let financial mistakes turn into a huge snowball.
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