Is limited attention the reason for your financial stress?
Many of our behaviors stem from inattention. And it is often our behaviors that cause us financial stress. Let me say that another way - the barriers to money management and saving are primarily behavioral and not financial – especially if those behaviors have resulted in over consumption, spending what we earn or more than we earn and taking on debt which further compounds the problem.
Too few of us really pay attention to details, we are bombarded by glitzy advertisements, we spend hours each day on social media sites, such as Twitter and Facebook, zooming from place to place in our cars. We have become accustomed to sending and reading emails and text messages in shorthand. We read shorter and shorter articles instead of books.
Psychologists and economists call this period the attention economy where attention has become the limiting factor. I like to think of it as the limited attention economy.
The limited attention economy is part of the reason we have financial stress in our life. We don’t slow our brain down enough to think and give full attention to what is right in front of us. To give attention to what we are doing with our money, sure we may worry about money but worrying is not the same as giving attention to it. When we give attention to our money we start to manage it. We don’t get hijacked by emotional impulse purchases.
Attention is not always about the present – it is also paying attention to the future. Our attention is focused on setting realistic goals and saving for them, when we don’t we are giving lack of attention to our life and our plans.
Debt is a classic example of the attention economy. Debt is available on-demand, at the moment when an expenditure opportunity arises (unexpectedly, due to limited attention) and is momentarily at the top of our mind.
Lack of attention is a behavior problem right up there with lack of self-control. But with our money we can use hot triggers or reminders to grab our attention and help us stick to our goals. Such reminders would do little to affect the self-control problem but would affect attention.
Regular reminders will increase saving for our goals by heightening memory (attention) of future happiness. And reminders that come from a friend or other trusted third party are better than just sticking a post it note on your desk or refrigerator. Behavioral Economists say that reminders that draw our attention to specific expenditures or goals are more effective. So if you do need a reminder about a savings goal, rope in a friend and ask them to be as specific as possible with the reminder.
Stress is caused by worry and claiming we do not have time to think. But when we slow down focus on where we are and what we are doing it is amazing what we can accomplish. Stress begins to fall away when we do not let our attention wander and give our money management our full attention and priority. Join the conversation and tell cashy -- what attention issues cause you to lose focus on your money goals?