When it comes to making financial changes, you might be your own worst enemy. One of the ways you may be working against yourself is by exploiting of mental loopholes: rather than sticking to what you said you would do, you find a reason or justification not to follow through. It’s not really your fault—your brain is trying to protect you from having to do extra work. Even so, if you want to make a change to how you spend money, you’ll need to learn how to spot and avoid these loopholes.
I should buy this because it’s on sale
A sale can prompt you to make a purchase sooner than you were planning or to buy something impulsively that was never even on your wishlist. This loophole works because it changes the equation and makes it feel like you are actually saving money by spending money. It also can create a sense of urgency to make the purchase, overriding the planning part of your brain.
I’ll start sticking to my budget next month
When it comes to following a budget, the one thing you can count on is that not everything will go to plan. When it feels like you “messed up” or something unexpected throws off your plan, it’s natural to want a fresh start. While every moment is a possible new beginning, setting a starting point that’s further out (like next week or next month) pushes off the mental burden of having to start now.
I need this
If you need something, you need it, right? The hidden danger of this loophole is that you might mentally categorize some “wants” as “needs” to justify buying them. This can range from needing a coffee to get through the day to buying a new car when yours starts acting up rather than getting it repaired. There is nothing wrong with making these purchases if you can afford them or have planned for them, but make sure you acknowledge to yourself whether it’s really a want or a need.
I’ll start saving when I get a raise
You may tell yourself that it’s not worth saving now because the amount you can save today is minimal compared to how much you could save when you get a raise. Once again, delaying getting started gives you an excuse to wait to make a change. However, regardless of how much you can save, there is value in getting started as soon as possible because you get your systems set up and practice those savings “muscles.”
