Hey fellow traveller, it’s me again, Journey-Man and we need to deal with the tough topic of self-control.
A month (you know the long days between pay-days) can be quite long! I have made some tough decisions and am trying to stick to a plan, but reality kicks in and every day is a minefield of temptation.
Isn’t this the way it works, when I decide that I should be eating well, I am suddenly more hungry than I have ever been and all I can see is food? It is the same with my finances. But temptation has to be dealt with if we are to move ahead.
As mentioned in previous articles, seeking the truth and facing reality is a big part of the Late-Starter Journey. The truth is we are late-starters because we’ve made (some/many/too many) bad financial decisions. It’s quite likely that if you are a late-starter you too have made choices, big and small, that you regret. Throughout our lives we have probably over-spent, saved too little for later, ignored reality and left a few bills unpaid.
Why have we made bad financial decisions?
This is a tough one but one of the reasons is our lack of self-control.
Whether you admit it or not, late-starters will generally have self-control issues. I know we’re all different and my problems (and their causes) may not be the same as yours, but we seem to have arrived at the same place and there appear to be a few common threads. Perhaps you too have self-control problems.
What does it look like for people who consistently control themselves? It has been shown that people who have a high level of self-control display a number of positive traits which manifest in their lives. People with good self-control are:-
- More likely to save regularly from their salaries
- Better prepared to manage unforeseen expenses
- More likely to have enough money for retirement
None of these things describe me (yet). Until now I haven’t saved regularly, I haven’t been prepared for emergencies and I definitely don’t have enough money for retirement. I have tried (to start) but I’ve failed, time and time again. I could argue and justify as much as I want but the truth is that I have self-control problems.
What is Self-Control?
Self-control is simply the ability to overcome impulses. When we have self-control we are able to break bad habits and resist temptation. It is as simple as that. But, what difference does it make if I control myself or not?
The answer presents a somewhat strange concept, I have to control myself because there is a ‘Future-Me’ to think about, the Journey-Man in fifteen or twenty years from now.
The person who will need as much of what I have now, as possible. Future-Me is a person who is relying on me to save, to think, to resist temptation. Future-Me is the person who is going to live out the consequences of what Present-Me does now. I love this concept! I love the realisation that I am that person and that I need to do whatever I can to make his life as easy as possible. Just the fact that I can is amazing to me.
And yet these two ‘me’s’ are quite disconnected, they think differently from each other, they understand different things. They need different things.
Even more amazing is the realisation that I am the Future-Me of the Teenage-Me, the Twenties-Me, the Thirties-Me. The ‘Me’ before I started earning a salary, before I started working. The ‘Me’ before I started businesses. The ‘Me’ who was apparently willing to disregard the future or the speed with which it arrives. The ‘Me’ who didn’t really know what to do.
What could I say to the Past-Me’s?
Absolutely nothing. As much as we would prefer for things to work the other way around, they don’t. We can only speak to Future-Me, we can only influence and plan for Future-Me. For Past-Me it is too late.
Not being interested in saving for retirement, when I was young, was due in large part to the fact that my Twenties-Me was completely disconnected from my Future-Me. I was interested in what I needed ‘now’ and was willing (convinced/coerced/manipulated/duped/dumb-enough) to spend what I needed to spend (whether I could afford it or not) to satisfy the impulses of the Present-Me.
It is that disconnect that led to bad decisions and debt.
Retirement is for old people!
According to a recent survey, I am not alone. Most young people are disconnected from their Future-Me’s. It seems almost impossible for us, as young people, to consider ourselves being old and retiring. I think the reason most young people have no interest in savings and investments is because the savings and investment ‘Industry’ keep insisting that they save for retirement!
Retirement is for old people. Retirement is about the end. Retirement is outdated and irrelevant! It doesn’t surprise me that young people have no interest in Pension Funds or Retirement Annuities.
The names of these things are enough to make even the un-coolest young person wretch (more about that in a later article).
I know now that Young-Me never really mastered the art of self-control. The self-control I have now has taken a lifetime (and many hard lessons) and, even now, it is something that I have to work on constantly (I mentioned persistence and consistency before, these are attributes that have been learnt along the way).
People who show good self control as children find long-term success in many areas of life. These people generally enjoy better physical health, have higher socio-economic status, are more likely to be homeowners, have retirement plans and are less likely to commit crimes. There are obviously exceptions to every rule, but generally this is how it works out. More self-control as a child leads to a better life (and a happier Future-You).
Research has shown that self control has a positive effect on general financial behaviour even when controlling for other variables such as financial literacy and income. Read that again. If you have kids, this is valuable information which could have a life-changing impact the next generation of Me’s. Do something about this now.
What’s the point?
Perhaps you are wondering where the great financial and investment advice is (please remember that we don’t provide financial advice, but we can put you in touch with a professional financial planner). Perhaps you are wondering where the tax tips are, where the product advice and financial solutions are. But the fact is, unless you understand that the greatest contributor to the welfare of Future-Me is your ability to control Present-Me, we can’t solve anything. You may be lucky, you may hit the jackpot – but that’s highly unlikely. I would suggest that it is highly improbable (ask Past-Me).
It’s time to move on.
I will be learning more about increasing my self-control and I will share that as we journey together. For now, remember that you have to do something, and you have to act quickly. There is still time but if you keep doing what you have always done, you know the rest! There are some other interesting and valuable insights to share here which may assist.
Firstly, it has been shown that optimism helps! Optimistic people are less anxious about their finances and become more confident in their financial situations. Work on your attitude.
Attack your financial problems with optimism.
As tough as things may seem, there is an answer. You may not like the answer, you may have to sell some things, you may have to stop buying things, you may have to shop at different places, you may have to stop taking cellphone contracts, you may have to stop watching pay-TV. You may even have to find more work. These are tough facts but when you attack them optimistically you will find that you can change your situation.
Self-control speaks to the one thing that needs to change before anything else, the one thing that can change your financial situation. Self-control is about ‘self’, you – the one person who has had the most influence on your current finances, the only person who can save ‘Future-You’. Yourself. Find ways to improve your self-control, there is so much literature available.
Each of us is different and we will react and respond to different methods, but you (YOU) need to seek out and find that method, the one that works for you. You need to improve your self-control.
In my next article I will deal with a few ways that we can improve our financial self-control.
Connect with Future-You!
One of the strange things that I did this week (maybe just to kill time so that I wasn’t thinking about spending money) was to log on to FutureMe.org This site allows you to write a letter to yourself and post-date the delivery. I wrote myself a letter which will arrive in a year from now. I told that Future-Me I am doing some positive things and making sure that he would be in a better position than me.
Try this for yourself and feel free to share your letters with us.
We have a long way to go but we have hope and we know that we are going to arrive. Here I come Future-Me!
Until next time, this is Journey-Man
Working hard, walking hard and taking drastic action. Not just for myself, but for my kids and the next generation of Journey-Men and Journey-Women.
Next time on LSJ* : Life Happens?
*LSJ : Late-Starter Journey (of course)