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Taming your Financial Temptations

Most people would admit that self-control is a huge problem. This does not bode well for any activity that requires self-control to achieve a goal. Whether it’s an extra piece of cake after dinner or new shoes you don’t need, self-control is integral to all our lives.

Self-control is important when it comes to our financial wellbeing. We require the self-control to curb excessive spending, deciding on the best-suited investment company and to help us remain invested in a product even when poor performance tests our resolve.

Self-control is the willpower to keep our impulses in check in order to achieve our long-term goals. In fact, it’s one of the core attributes, which separates from the rest of the animal kingdom. Self-control allows us to subdue our impulses, which gives us the space to evaluate alternatives and develop a plan that directs our attention appropriately in order to achieve our objectives.

That being said, we know just how elusive self-control can be for some of us. Our willpower is quick to slip away in the most inopportune of times and it is often difficult for us to identify the mechanisms behind our poor habits. Below are six tips to help you identify why our willpower fails, making you more aware and bolstering your self-control:

  1. You must find balance: Willpower can only be sustainable if there is balance. The all or nothing mentality is often our downfall. Committing to a long-term goal does not necessarily mean sacrificing all the luxuries in life. Small rewards can help you feel less resentful towards saving and renew your commitment to a goal. A little indulgence can alleviate that feeling of punishment that can sometimes accompany saving.
  2. Self-control diminishes with time: We often begin the month with good intentions, but somewhere along the way we falter. We tell ourselves that we’ll save whatever is left of our budget at the end of the month, but that doesn’t always work out. A great counter to this behavior is to setup a debit order to your savings for the start of the month, which allows you to forget about it.
  3. Cognitive overload: When we face periods of intense mental stress we tend to have less energy for self-control. People are more likely to impulse buy during times of stress, but this is almost always followed by regret. Stress-spenders, who are looking to save, should avoid putting themselves in any tempting situation.
  4. Misinterpretation of cues: A cue prompts action and we tend to respond to certain cues in similar ways. However, our interpretation of a cue might not always be correct, but we can recondition our perception of a cue. Rather than viewing money in your bank account as a cue to spend, you can recondition yourself to see it as a cue to save.
  5. Our biggest enemies are our entrenched patterns: Cues can lead to behavioral patterns that are hard to alter. People fear change, especially when it comes to our finances. The only way to change our bad habits is by replacing our existing routines. Many people see getting paid as a cue to spark a routine of paying their bills, buying what they want and saving what’s left. They can change the pattern by paying their bills, saving a portion and then spending what’s left on something they want.

Setting clear rules can help change patterns: If you get a bonus or other windfall then you will invest that money. This commits you to a specific action rather than the generically stated goal of saving more. This is a good way to resist temptation and it helps to build good habits.

  1. Self-doubt: We tend to be our own worst enemies, with self-doubt getting in the way of our goals. Lack of belief leads to a negative feedback loop, which inevitably makes it a self-fulfilling prophecy. The only way to avoid this is to believe what you’re doing is worth it.

These identifiers should help you become self-aware and help you pave the way to greater financial success.

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