As human beings there’s a lie we all tell ourselves constantly.

It’s a lie we all, more often or than not, believe. It’s a lie we don’t want to admit is true. However it’s a lie which given even a degree of cursory thought is incredibly obvious…

As human beings we always make logical and thoughtful decisions.

The reality couldn’t be further from the truth. The reality is that whilst we sometimes take the time to make logical and sensible decisions

The majority of our decisions are reactionary and emotional…..and that’s absolutely normal!

The reality is that we wouldn’t get much done if we spent all day making really thoughtful and logical decisions!

Making thoughtful sort of choices takes a lot longer and uses much more mental energy. If you consider the number of individual choices we take in our lives each and every day we need to use mental shortcuts in order to take action.

However, and if you’ve been reading the threat of these articles you won’t be surprised, I believe that Dr Seuss has virtually got it spot on again!

In Oh! The places you’ll go Dr Seuss talks about “Games you can’t win ’cause you’ll play against you”.

However it may not be entirely clear how this applies to managing your money. Let me explain why it does…

I’ve already mentioned about the two ways we think.

Emotionally or Logically.

The Chimp or the Computer.

Homer (Simpson not the author of the epic greek poems) or Spock.*

The scary thing is that we’re more like a Chimp, or Homer Simpson than most of us ever realise! (and although I don’t like to admit it…me more than most!) and this impacts every decision we make including financial ones!

The Chimp (or the Homer) part of your brain has certain traits….

‘The Chimp’ likes decisions to be relatively simple, straightforward ones (which means that the tougher or more challenging choices you make are more likely to be put off)’The Chimp’ likes immediate pleasure even if that means losing our over the longer term (which means that this part of your brain isn’t too keen on delaying pleasure by saving for it’s financial future).

and

You can’t fight your internal ‘chimp’ (in most people he is way too strong). However you can look at techniques to trick your ‘chimp’ into better behaviour. I’ve only got the space to share one of the techniques here….but I will be sharing more at a later stage.

The Trick of the ‘small reward’ –

Try this.

When you find yourself putting off a financial decision (like reviewing your retirement provisions or setting your financial goals) break this down into smaller tasks

These might be find the paperwork, then phoning for up to date values, then checking whether the schemes will help you fully achieve your longer term goals, then detail any action you might be able to take, then take the action step by step….

….but here’s the important bit. Give yourself a little present every time you complete a tiny task.

This may be as simple as making yourself a cup of tea, or a mental pat on the back, or a dance, or a biscuit….as long as it’s meaningful, immediate and makes you feel good at the time it’s worth doing! It will go a long way to satisfy your internal chimp and allow you to continue to perform small tasks which will help you achieve the longer time lifestyle you deserve.

By doing this you can make small gradual steps towards financial freedom and as Dr Seuss might say “Win the game you’re playing against you”.

* (these two explanations are the ones used in the books Chimp Paradox and Nudge respectively).