Sushi Money

Sometimes we make some strange decisions involving money.  At the time we often think we are buying something we really need.  Usually it is something we really want for a host of reasons we may never understand.  And so often we haven’t really thought it through.   Last night I was watching the news and they were interviewing a woman who drove across three states with two young children to attend a Hannah Montana concert!  That wasn’t the amazing part- she made that trip without any tickets, prepared to pay whatever was necessary to get in.  And pay she did, giving a scalper over $450 per ticket to watch the concert.  She was quoted saying, “My husband thinks I’m crazy.”   Hmmm… really?   To each their own of course, and I hope that concert was a memorable outing for all of them. 

     I’ve made my own share of extravagant spending only to wonder later why I felt so strongly about something.  For example, I have a really nice shotgun in my closet that I purchased over 15 years ago for hunting.  It’s very nice, but guess what?  I’ve never used it.  I rationalize that now it’s probably a collector’s item, but looking back- I would have been far better off investing the money I spent on it.  And I can find a lot of similar themes just by looking around the house.  Why do we own some of these things!?   So often I think it’s about satifying some need within ourselves for very different reasons altogether.

Laura Rowly on Yahoo Finance has written a great article called This is Your Brain on Money. In the article she cites the work of author Jason Zweig who has written a new book called Your Money and Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich.   I haven’t read it yet, but it sounds pretty good.  Author Zweig takes a close look at why we make foolish financial decisions, and strategies we can use to avoid them and improve our financial lives.  It sounds like some of his key advice has to do with the basics, but also the essentials:  Put a good financial plan in place, and stick to it!  Easier said than done over the long-term, but it’s something we must work at to achieve our financial goals. 

     Foolish decision making isn’t always about money of course.  There is a host of research into Decision Science, or why we make decisions that are not always in our best interest, or that of the organizations we work with.   Most of this has to do with psychology and how our emotions can govern our lives.  This knowledge helps me to understand financial decision-making, especially where poor financial decisions result in too much debt, and too little financial security over the long term.  I read an article recently by Ron Blue on The Road to Debt that makes a lot of sense.  In the article  he cites four main factors as causes for problem debt:

1.  A lack of Discipline
2.  A lack of Contentment
3.  A search for Security
4.  A search for Significance

     These themes also have a lot to do with our habits, our emotions and the psychology involved in money decisions.  Does it help me to understand the personal psychology of using money, even in a spiritual sense?  Yes, I think it does.  Mostly because it helps me to reflect more about why I am going to make a certain decision, or why I want to buy a stock or some other item for the home.  I then ask myself, what meaning or need will it fulfill in my life?  Why do I need to purchase it now?  

    I know I must work at staying disciplined in meeting my financial goals.  That is more than a daily thing- to achieve success over the long term I need discipline that lasts.   And that’s where Contentment, Security and Significance come in…  We can try to explore what is important to us individually and within our family and community.  We can try to do things that bring joy and growth personally, and to others over the long term.  We can focus on achieving positive outcomes, and what Curt Rosengren calls Skewing the Bell Curve of Potential Results.   For me, it all serves as a sort of self-improvement project for one’s entire life.  And heck, if it helps us improve our financial futures, then that’s good enough for me.  I often wonder what foolish money decisions other people have made.  But do you know what my most foolish money decision was?  Not starting to save and invest sooner.  The simple measure of time does amazing things for a portfolio. 

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