Our Brains Are Wired to Make Us Broke, Here’s How To Fight back.

Wahed Editors

 

Let us tell you a story about John, a rich guy who is broke.

John, born in a small town moved to the big city right after college. He was here to make it big. He was smart, ambitious, and could boast of the right mix of things that one needed to get ahead in the world. John was a lot like us. In fact, he still is.

After a short struggle, he scored his first job, and never looked back. He worked hard, got promoted, and every year his income increased. He now had more money than he had seen before. Naturally, the excess of money got him noticing shoes, and watches, and bags. He wanted them all. He read the GQ and soon was not only successful but also one of the most fashionable bachelors at work.

One day he went on a small trip with a few of his friends. He loved it. He was bitten by the travel bug. He wanted to see the world. He wanted his tombstone to say that he had visited every country there was – and he made it his life goal. Travel was important to him. Travel exposed his mind so much, and his rented apartment seems small in comparison. His thoughts needed breathing space, and a bigger place to live, and his drive to work needed a new set of wheels. He decided to get the sedan in red because it was his colour.

Can you blame him? He had it all. Till he didn’t.

Now, this is not all of us or even some of us. However, whether we like it or not, our surroundings have helped wire our brains to get broke. No, let’s not blame the internet, or FOMO, or whatever the new term for it all is, let’s just get to the part where we fight back.

Train your mind

It’s easier said than done, but willpower does not stop at simply sculpting your body or fighting back the urge to eat a little extra, it also extends to a lot of other things, including how we spend our money.

It’s important that we train our minds to evaluate the expenses we make. I often recommend keeping a track of areas where you spend each day, so you can understand your pattern of expenses and only cutting down where you know money is being wasted.

 

Prioritise expenses

Warren Buffet popularised the saying that one should not save what is left after spending, but spend what is left after saving.

Yes, that new pair of shoes or that extra bag is important, but can it wait a month? While it is easy to spell out the life of a monk, we do live in a world where vanity is given a great deal of importance. Having said that one should be able to prioritise the important expenses over the unimportant ones.

s this month going to be heavy on the pockets because of your wife’s birthday? Then push the purchase of that new mattress you think you need today to the next month. This not only helps you respect the money going out, but it also allows you to save before you spend.

Invest

Yes! Start investing today. Growing up, my father would often bring up this topic, which in my head was nothing short of a boring lecture. Today, I couldn’t say this enough. Invest your money before you start spending each month.

Luckily for us, the ‘internet’ we mentioned above has opened up various avenues through which we can not only save but also grow our money. There are safe options such as government bonds, slightly riskier options such as mutual funds and shares, and if your appetite permits, there are other riskier investments too. While I would recommend you stay in the safe zone if you are just starting out, the point is, there are options you can pick right off the internet.

Beyond the ‘risk’ level there are options within the type of investments as well. There are the traditional sources to invest, or if you want an ethical option, companies such as Wahed Invest offer ethical investment opportunities too. It’s a world of options out there, and you must go forth and explore.

In summary, our brains will also push us to go broke, but it is well within our power to fight back. Just a few small steps of change and you too will be on your way to a life that is very different from John.

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