When It Comes To Your Finances, You Need to Protect Yourself From Yourself

I see a lot of quotes being banded about that say how dealing with your finances is more to do with psychology than maths, and I wholeheartedly agree with this.

After all, if you ever look at the maths of your finances, it can seem obvious how much you need to spend and that you should have loads of money saved or invested after years of working – but the reality isn’t like that is it?

The reality is that the average UK household debt is Β£12,887 – and that’s before mortgages are taken into account. Isn’t that a crazy huge amount? I was quite surprised to hear that is the average, even with the access to the information that I have through this blog.

I’ve discussed this a bit in one of my posts (habits of people who stay out of debt) – it is human nature to desire what another person has if it is perceived to be better than what you have – due to survival instincts that have largely been created in the mental evolution in the Paleolithic period.

With the ever increasing exposure to celebrities and every other person on social media – is it any wonder that we desire to have more and more? We are guided by advertising companies who tell us that in order to be more beautiful, successful etc we need to have the latest tool or gadget in order to achieve this. They use psychology to target specific groups and have strong copywriting skills to convince us that it is what we need in order to be happier.

The ultimate human goal is to be happy. Happiness is what we strive towards every day, and to be truly successful in your life is to be happy. Happiness means different things for different people, but it still stands that we all wish to be happy.

With all of the advertising thrown at us and social media, it can be easy to see why we think we need to buy things in order to achieve happiness. People who are addicted to shopping feel a rush when they purchase something, and strive to keep getting that feeling over and over – through buying more.

At the end of the day, we need to face up to the fact that if we are not where we want to be financially or in life in general, it is down to ourself.

I’m not saying this to be overly harsh or mean, but because it is the truth. (This is a generalisation aimed at people who could be in a better place financially than they are currently). The person who is spending your hard earned money is you. It’s not the fashion influencer on Instagram, it’s not your best friend or your mum, but you.

It can be a hard thing to own up to – that your financial shortfalls can be your fault. Again, I’m not saying this to make anyone feel bad, as I appreciate it is not that black and white for everyone, so feel free to skip this article if you are someone who this does not apply to.

When I got into debt, it was my fault. I do place a lot of blame on my husband (if you’re reading this, sorry but you know it’s true!) – but I was the one who took out the loan and cards. I was in a bad place, and I definitely understand if you are also in this place, and would love to help you protect yourself from yourself.

This may sound a bit ambiguous, but we can protect ourselves from the greatest threat to staying on track with our finances – ourselves. So how do we do this?

Remember That Future You Needs You To Get This Right

This is important. We are programmed to think about the here and now, and not so much about the future. It’s so far away, it’s hard to imagine what we are doing now will affect us years down the line. Your decisions now will affect future you.
One of the best things that you can tell yourself if that what you are doing is for your future self and loved ones. It may be difficult now, but it will be worth it.

Unless you have a crystal ball, there is no way to predict what will happen to you in the future. Unfortunately bad things are likely to happen – but by preparing for this the best we can it doesn’t need to be as bad as it could be.

Even though it’s hard to think of ourselves in the future, it’s likely that we will want our current selves to make the right decisions. What do you think you could do now that could benefit you in the future, even if it doesn’t benefit you now?

Automate Finances

When you have a ton of bills going out at different times each month, it can be hard to keep track. If you have internet banking, it is really easy to set up direct debits and standing orders for your payments. Something that you can also do if your payments are spread over the month is to ask your providers to change the date that it comes out.
Similarly, if you get paid biweekly for example, you could change your direct debits to be more spread across the month for ease.

It doesn’t just need to be for your bills as well – but for your savings as well. If you set up direct debits to go out to your various savings accounts, you will be much more successful than if you look at how much you have left to save at the end of the month (because there probably won’t be much left!).

Don’t Go Shopping When Hungry

If you go shopping when you are hungry, you can guarantee that you will buy more than you need. The reason? We get into survival mode and we cannot think straight when we know that we need food. Food is essential for our survival after all!

When you go food shopping, take a snack with you so that you can concentrate on your shopping list. Ideally as well, go first thing in the morning so you aren’t affected by decision fatigue.

Keep Snacks To Hand

Again with the food as mentioned above – we don’t tend to think straight when we are hungry. Ideally, you will have snacks that you’ve prepared on you, but if not, I find it is good to have a backup plan such as keeping some crisps in your bag or car (you will always find some in mine!).

If you are trying to keep food shopping bills down, this can be a life-saver. It’s hard to keep costs down if you end up spending money all the time on food that you don’t actually need.

Keep Away From Online Shopping At Night

Have you heard of the ‘vampire economy’? It’s where people are staying up really late and because they are bored, they are going online shopping and spending lots of money ordering things that they don’t necessarily need.

There is obviously something deeper going on if you are unable to sleep at night, and it would be worth looking at habits to help you get to sleep – and put yourself on a ban of online shopping at night!

Put Your Savings Somewhere Awkward To Reach

When you have money in savings, it can be extremely tempting to dip into it whenever something sparkly catches your eye. One of my favourite tips for keeping on track with your savings, is to put it somewhere awkward for you to reach. If it’s in a savings account that you can reach easily with a couple of clicks of a button, it’ll be way too tempting to transfer it over to your current account.

Look into some awkward to reach savings accounts – perhaps ones which you can’t access online, or ones where the branches are few and far between. There are some accounts where you are only allowed to withdraw money a certain amount per year – or not at all (e.g. a LISA).

Meal Plan

I always suggest meal planning – because at the end of a long, hard day, it is oh-so-easy to reach for the takeaway menu or pop to the shop for a ready meal. There is enough time in the day to cook from scratch – although something else that I definitely recommend is to batch cook. Batch cooking is when you cook a meal with double, triple, quadruple portions which you can then separate and freeze, ready to heat up again another day.

Meal planning may sound boring, but it will help your brain overrule your stomach!

Use Cash And Leave Your Card At Home

Again, when you begin to pay off debt, something that is generally recommended is to start using cash instead of cards. If you only take out the exact money in cash that you can spend – that’s all you can spend.

It is proven that when we pay for our purchases on card, we spend more (the most commonly referred to study found that we spend 12% more when spending on card vs cash). It has also been found that when paying for food shopping, those who paid with card were more likely to make unhealthy impulse purchases.

Avoid Decision Fatigue

I speak about this in great detail in one of my posts. It’s a term that I came across during my University studying (current student!) and it fascinated me, because it can be applied to help improve your finances and your life in general.

Decision fatigue in basic terms is where you make so many decisions throughout the day, and become mentally exhausted from doing so. When you become mentally exhausted from making all of the little decisions that we make each day, from things as simple to what to eat for breakfast that day, we end up making the ‘easy’ option – which is usually bad for our finances.

We mentally overload ourselves and are such busy people, and it’s also proven that poor people have bad financial situations are more likely to succumb to decision fatigue due to the more decisions that need to be made when you are sticking to a tight budget.

There are great ways of reducing decision fatigue, such as wearing the same kind of clothes every day, eating the same kind of breakfasts, meal planning etc.

Is there any way that you can protect yourself against yourself?