source article: Michael Batnick
Historically there has been much written on the parallels between dieting and personal finance. In both cases, we know exactly what we’re supposed to do, but just knowing is not nearly enough. Our brains function in such a way that sometimes it helps to completely remove our mind from the equation. Sometime times we have to introduce a barrier to the way we think. However it all comes down to having systems in place that can help guide our actions. Generally this would be true of dieting, exercise, personal finances and investing alike.
Every day we are confronted by simply too many choices in terms of both food and finance to be able to use your willpower over and over again to make the right decision. Thus most of us need rules in place to help drive that elusive behavioural change we all seek.
Saving money can be tricky but provides a good example of how you can get things done by removing yourself from the equation. Set up a savings account that automatically directs money from your wages into your investment account. This way you don’t have to rely on yourself to spend less, or to remember to move money from one account to the other.
Changing our behaviour requires more than just awareness of a problem. We have to take be proactive, introduce a mental barrier, or make something automatic. If we are left to our own devices the effort to accomplish everything we need to do is often just too hard. I don’t know who said it but there is sense in this observation, “If it was easy, we would all be rich with six-pack abs.”