Cape Town - You're more likely to splurge when you're feeling stressed and the high from retail therapy is often followed by the bang of reality, warns Jeanette Marais, director of distribution and client service at Allan Gray.
She says research indicates that people do not seem to rank self-control very high on their list of strengths.
Ahead of the anticipated annual Black Friday shopping frenzy, she offers some tips on how to avoid temptation and stay on track with savings goals.
"We need to exercise self-control to spend less. We also need to exercise self-control to remain invested when news headlines test our resolve," she explains.
"Rather than responding to immediate impulses, we have the innate ability to plan, evaluate alternative actions, and avoid doing things we will later regret. This willpower allows us to direct our attention appropriately, and it underlies all kinds of achievement."
Here are her 6 tips to avoid willpower failing:
1. Too much will, too little balance
For willpower to be sustainable, you need to create balance.
"We are prone to all-or-nothing mentality, which is our downfall. When it comes to saving, small rewards can make you feel less resentful about saving and may help you commit to your long-term cause," she explains.
For example, if you get a bonus, allow yourself a little indulgence and you will feel less like you are punishing yourself by saving the rest.
2. Self-control runs low over time
When managing finances, you tend to begin the month with good intentions but as the weeks go by, you falter. A good way to counter this is to set up a debit order for your savings that comes off at the beginning of the month and then forget about it, rather than telling yourself you will save whatever you have left over at the end of the month.
3. Cognitive load saps resources
The more mental stress you face, the less energy you have to devote to self-control. If you are a stress-spender, avoid putting yourself in tempting situations.
4. Misinterpreting cues
A cue is something that prompts an action.
"One tends to get into the habit of responding to certain cues in the same way – but this does not make our interpretation of the cue correct," explains Marais.
"It is possible to recondition ourselves to interpret cues differently. For example, when we have money in our bank account, rather than reading this as a cue to start spending, we can recondition ourselves into interpreting this as a cue to save. We need to focus on this new, better behaviour."
5. Break entrenched patterns
You can change the way you react to cues. Cues often set off a chain of events and these patterns themselves are hard to alter.
"We are all very change averse, and when it comes to spending habits we are stuck in our ways. We need to replace existing routines with new routines to slowly change our habits," says Marais.
For example, if being paid is a cue that signals spending, and your existing pattern is to pay your bills and then buy everything you want and finally to save, change your pattern to save a portion of what remains after your expenses, and only then spend on non-essentials.
"One way to change entrenched patterns, according to some psychologists, is through ‘if-then’ planning. This is a great way to resist temptation and build good habits, because it commits us to specific actions," says Marais.
For example, tell yourself: “If I get paid a bonus, I will make an additional contribution to my investment.”
According to research, you are two to three times more likely to succeed in changing habits if you use an "if-then plan", than if you merely state a goal such as “spend less, save more”.
Psychologists explain that "if-then plans" work well, because they speak the language of the brain: the language of contingencies.
Deciding exactly when and where you will act on your goal creates a link in your brain between the situation or cue (the if) and the behaviour that should follow (the then).
"If-then plans" have been found to be less demanding and require less willpower than simple resolutions.
6. The belief deficit
"We are our own worst enemies – our self-doubt gets in the way of us achieving our goals. If you don’t really believe you can achieve something you are developing an internal feedback loop that will prevent it from happening," says Marais.
"If you want your brain to believe you can do it, you need to believe that what you are doing is worthwhile."
* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER