The most overlooked aspect of financial health has little to do with having the right strategy, having more income, or being excellent at math. Many writers don't want to talk about it because it doesn't sell books.
We are talking about self-control.
Money is an area where many lack self-control
In his book, Behavioral Finance & Wealth Management, Michael Pompian states that The Saving Decision "…reflects an individual’s relative preferences over present versus future consumption."
In other words, "Do I want to buy this now or would I rather save my money for something more important later?"
Holding onto money in savings is not exciting
There is a huge temptation to do something that is exciting or more enjoyable with that savings.
It requires self-control. Having money that is accessible is very important in life.
Some solutions to self-control problems
Negative motivation
Automate savings/paying bills
Reward substitution
Identify the weakness to your financial health. Is it due to behavior or an unhealthy belief? Decide on a different response to your unhealthy financial behavior.
If you have a question or comment about today's topic, we invite you to share your thoughts.
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