I consider myself to be a pretty disciplined person. So why is it so difficult to deny that second piece of dessert? I know exactly the right thing to eat or not eat to keep healthy. I even believe I could be a nutritionist. But there is this physiological pull toward sugary treats that occasionally strips rational thinking from my brain and leaves me with a sense of disappointment.
This phenomenon makes me think of how often we all make decisions that fulfill immediate gratifications but may not be in our long term best interests (or maybe I’m just resentful of the extra mile I had to run this morning).
The fact is – it is hard to deny our impulses. Not just with food, but in all aspects of our lives and particularly spending. Yes, we all know that peer pressure is a factor. Many try to keep up with the Joneses, comparing homes, cars, clothes etc. But I think the darkest danger lurks deep within ourselves not our neighbours. In his new book The Wealthy Barber Returns David Chilton says: “The reference group you often need to be most wary of is not your affluent friends, or even your wealthier work colleagues; it’s you, yourself.”
We have a need for instant gratification. And it is so easy to spend. With innovative technology, retailers have much easier influence over our decisions. My super cool Starbucks app doesn’t even require that I carry a wallet! And based on our location, deals pop up on our smart phones that help to bypass all internal debates we need to have to make a thoughtful decision. It’s kind of like the “casino effect” applied to day-to-day spending. Pump up the oxygen, lose all sense of time, replace hard earned cash with chips and keep the gambling or spending going!
Impulse buying is the Achilles’ heel of the saver. It happens to the best of us. Although it might be a good excuse to blame it on technology, it really is our responsibility to control this impulse. I mean we all know how to control other impulses why can’t we conquer this one?
We tend to focus more on today than tomorrow and in some cases, that is merited. However, we often put immediate desires ahead of future important needs. There are of course plenty of triggers – we are bombarded with spending opportunities everyday. So even if we are able to have that internal debate about whether to buy or save, we are bound to give in sooner or later.
But let’s look at it like this: Do you realize that if you deny one $10 indulgence every week that you will save over $2,600 in 5 years and nearly $15,500 in 25 years? If you did this everyday – you know, skip a latte, pack a lunch or quit smoking – the $10 you’d save everyday would value over $18,900 in 5 years and over $108,000 in 25 years. You can actually retire a few years earlier!
Although this is all true we seldom look at it that way, but we should. And apparently, Canadians would actually change their habits, with a little help. In a new survey we commissioned at ING DIRECT, 52% of Canadians said that if they could better visualize what foregoing their daily, weekly and monthly spending on non-essential purchases would save them over the short and long term, they would in fact change their spending habits.
Based on these findings and our leadership in using technology to simplify the banking experience, we decided to create something to help Canadians do exactly that, and live better, happier lives. We added a new free feature to our leading mobile application called “Small Sacrifices” to help consumers visualize how foregoing everyday indulgences and sending them directly to their savings account can lead to big savings over the long term.
It can be especially hard to save for things that are far off, like retirement. We tell ourselves we can always start doing it tomorrow. But once we visualize how small purchases add up over time, we are more aware of the decisions, and small sacrifices, we need to make on a daily basis. It’s like putting pictures of our goals on our refrigerators.
We are faced with hundreds of choices everyday. And I strongly believe that visualizing these daily decisions, and how they affect the future, is the best approach to conquer the urge to spend. Happy saving and good luck!