How to make your life easier and richer (with science!)

Humans are great short term thinkers, and pretty poor long-term thinkers. We want things and we want them now. This makes things like paying down old debts, saving for the future, and cutting carbs oh-so-tough. Not paying debt and eating pasta is just...better than the alternative. At least, until a few years later when we’re cursing our younger selves and trying to repair the damage that was done.

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A big part of this reason is that in essence, we’re actually of two “brains” here - an emotional (short term) brain, and a logical (long-term) brain. As one author of a study on economic behavior said, “Our emotional brain wants to max out the credit card, order dessert and smoke a cigarette. Our logical brain knows we should save for retirement, go for a jog and quit smoking.” Even the most logical among us has felt this tug, and it’s telling to know that we’re really hardwired to respond to short-term stimuli. Flashing lights, great sales, oncoming tigers.

The problem is that there is no short-term benefit to saving for retirement, or paying off our debts. It’s not fun. All the benefit is in the long run.

We know that we should do it anyway. We know that dealing with this stuff is the right thing to do, for our own selves. It’s not like we need to be selfless or something, since we’re the ones that benefit! But it’s this detached future-you that benefits, and we’re notoriously bad at identifying with our future selves.

So our logical brains keeps pinging us and saying “do you want to be a burden on your kids when you’re older, or have to keep working until you die?” in a fool’s errand to poke at our emotional brain to react and take action.

What’s a short-term, emotional thinker to do? (Note: we are all short-term, emotional thinkers, of one stripe or another). How do we get ourselves to do the thing we know we have to do, when there’s something that feels better right now that we could do instead?

The line we are sold is that it’s all about willpower. If you have enough self-control, the old story goes, you can do anything, even if it’s very unpleasant (or at best, neutral).

The problem with this is that willpower can be hard to come by, and is similarly pulled in a lot of directions. How do you get around that?

In a word, systems.

This can look like automatic contributions to retirement, ideally with automatic increases each year as your income goes up. It can look like using a budgeting software that acts like a money dashboard, so you can use your brain for processing information instead of storing it. It can look like moving a percentage of your business or freelance income directly into a separate account for taxes, before you pay yourself (so it is less painful), or any number of similar schemes. Using cash and envelopes so you can’t overspend. Budgeting that works.

What, specifically, is best for you will vary based on your goals and what you find hardest to make happen in your life. But there are a few good rules of thumb:

  • Make it automatic. This is one area where I wholeheartedly believe in financial set-it-and-(mostly)-forget-it. Set up auto transfers to savings or retirement accounts and increase them annually. Once you pay your credit cards off, set them up to automatically be paid in full every month. Set up automatic payments on all of our typical bills (especially those that don’t vary from month to month).

  • Make fewer decisions. Decision fatigue is a sapping of your willpower as the day goes on. As you make more decisions throughout the day, your ability to continue gets depleted, and you take the easy route more often. It’s no coincidence that the easy route is rarely also the route to health or wealth. This is where having a reality-based budget and automatic savings really shine. How much can I spend on clothes? Let me check the budget, since that decision has already been made.

  • Make it come first. There’s a lot of value in the classic adage, “pay yourself first.” Among the reasons? It changes your perspective from “I get paid X, but then I have to take Y out of it to save for things I don’t particularly care about, and then I end up with Z for the rest of my life” to “I get paid Z.” One of these is a much easier pill to swallow!

  • Make it enjoyable, to the extent that you can. Run a report every few months showing how much your nest egg has grown. Reflect with pride that your other business-owning friends are lamenting their giant tax bill, while you are resting easy come April 15th. Celebrate your wins. Remind yourself of what you’re working for (freedom from debt, a healthy and relaxing retirement, not losing sleep worrying about an IRS audit).

All of this boils down to a lot of empathy for your future self, and designing systems that make things easier on you. You don’t have to use willpower and self-discipline alone to be a good adult; you’re allowed to lean on tools and ‘hacks’ that allow you to free up your attention for the rest of your life. You’re allowed to make this easier on yourself, so that you can be happier, healthier, and wealthier in the future.