"Every action you take is a vote for the type of person you wish to become."
I'm in my room looking at my bookshelf, counting all the books I have not read. I wonder to myself how I got so many of these. Why don't I read them? Why do I keep buying them? It seems like both a waste of money and a waste of space.
A day later, I see someone reading a book on the bus as I ride into work. I walk into the office, say hi to everyone, log into my computer, and go look at the book online. I buy it.
I have always been curious about many different topics. That's my stimulus. I come across a book about astrophysics, the brain, or death, and I imagine myself wanting to be the kind of person who knows that stuff. Because of that, I buy them immediately. That's my response.
I have no space in between the stimulus (my impulse) and my response (my purchase).
Fast forward 13 years to today, and I now keep different lists for books that I THINK I want to buy. There are easily 25 books on these lists right now. I'm glad I haven't bought them yet, because I don't have the time to read 25 extra books. Some of them stay and I eventually buy and read them, but many of them get deleted when I realize I'm never going to read it.
Introducing space in between these stimuli and my response has helped me stop overspending on books.
Increasing the space between stimulus and response helps with more than just books, it helps us make purchases with more intention, and curb our overspending.
Money Is Stressful
Money is among the most stressful things in our lives. More than 60% of Americans say that money is the top stressor in their lives. Further, it's one of the top contributors to marital strain. It's hard to think about, it's hard to talk about, and it's hard to handle.
Just because 38% of people say that money is not their TOP stressor doesn't mean that it's not stressful. With some exceptions, money is stressful for all of us.
It's no wonder money is so stressful for most of us. A large percentage of us are living paycheck-to-paycheck - meaning, a third of us have little or no room in our financial management to weather a missed paycheck.
You might be living paycheck-to-paycheck yourself. If you're not, you might be tempted to think this is only a phenomenon for people at or near poverty. But, the people living below the poverty level make up only a fraction of those living paycheck-to-paycheck.
That means that, even if every single household in poverty is paycheck-to-paycheck (which isn't necessarily the case), there are still many folks living paycheck-to-paycheck who aren't in poverty.
If you live paycheck-to-paycheck, you can't save. But not saving doesn't mean you are paycheck-to-paycheck. For many people who don't have to wait until their next paycheck to pay bills, they still struggle to save. I know of a person I'll "Pat" who makes $4 million per year but spends $3.5 million per year. You might be thinking that $500,000 is a good amount to save each year, but remember two things; 1) taxes eat away most of that, and 2) Pat will never be able to retire and keep the same $3.5 million per year lifestyle by saving 15% of the annual spending (meaning, it takes seven years of savings to save up enough to spend purchase one year's worth of expenses).
Not saving is a big problem, but it's predictable. Emotions today are real. Marketers know how to separate us from our money. They make it easy to spend. Emotions in the future don't exist (yet). The future doesn't feel the same to us. We rob our future selves to pay off our present selves.
When things happen to us we have a reflex. In the physical world, reflexes happen because we catch in our peripheral vision. In the non-physical world of money, it could be a strong impulse to spend money (by, for example, buying a book after seeing someone else reading it). After our initial reflex, we feel some emotion. Only then do we start to have thoughts and form opinions.
If we make financial decisions too quickly we haven't started thinking yet. We let our emotions and impulses get the best of us. Undersaving is, in many cases, caused by overspending, because we haven't thought through our financial decisions properly.