Making a plan is easy. We’ve got all kinds of ideas about how our future will go, especially as it pertains to money, investment, and insurance. This isn’t true for everybody, but you are financially literate. You read money blogs and you probably have a financial spreadsheet or two to help organize your complex financial life. It all sounds so perfect.
So why is it so hard, in the day to day, to actually make your financial plans work out?
That’s because of the foibles which are built into your own brain. The human brain is complex. It evolved over many millennia to handle a variety of tasks. It’s adaptable and powerful, but it wasn’t built to work with money. Money is a recent innovation, compared to the history of the human brain, and it can be difficult to make the two institutions work together.
For example, Prudential investigates many different aspects of money management that people commonly have trouble with. Procrastination is a great example. People often want to take some time to learn more about life insurance, but they put it off and put it off.
Why do people delay things that would provide them with a lot more peace and security? Well, Prudential demonstrates how the brain actually gets tired throughout the day, specifically the part that has to do with decision making. This region of the brain also has to manage your brain’s impulsivity.
The impulsive part of your brain is a total anarchist, and also like a little kid. It just wants to do what it wants to do. These two parts of the brain are at war all the time. To make sure that the decision making part wins, you’ve got to do hard work early in the day, and give yourself breaks if sticking to a plan gets hard. This way, you’ll be able to manage your money, investment, and insurance needs a lot better.
Hi, my name is Jon and I run Penny Thots. I’ve been interested in personal finance since high school and love writing and talking about it. You can learn more about me in the Authors section of this site.