In The Struggle Between The Hand And The Heart, who Wins?

We know what’s good for us in the long term, but it often seems as though there’s a strange force pushing us to do what’s not good for us. Especially when it comes to personal finance. If I told you to save an extra Kshs 5,0000 next month, you’ll tell me that your budget won’t allow for that. Then, when you see a great pair of shoes, or a new phone is released, your budget gains great flexibility. Why is this?

Research has shown that our brains are wired for immediate gratification. It’s a fossil of evolution, which served us very well in the early days of humanity, where each day was a fight just to survive until the next day. When you’re trying to resist immediate gratification, two sections of your brain are literally at war: the ventromedial area of your frontal cortex (impulsive) and the ventrolateral area of your frontal cortex (the more controlled area of your brain). To make things easier, we call the former our “hand” and the latter our “heart”. Our hands are always reaching out for immediate things, while our hearts hold our long-term desires. The two videos below explain how the conflict between the hand and heart works.

While we cannot change our brain, we can trick it into feeling as excited about our heart’s desires as it does when our hands reach out. One trick that we discuss in this post is to tweak the way we set our goals to match our actions. Instead of saying, “I will build a home in 10 years”, set a financial goal for the week. A goal for next week could be: “This week I will take lunch to work to save money”. It is easier to modify behaviour when you know that you only need to do it for a short period of time. Once you do it for a week, you roll over to the next week and with time, taking lunch to work becomes habit and your bank balance thanks you for it. 

For the next two months I’d like us to practice this goal setting strategy.

Set a savings goal

Set a savings goal you would like to achieve in the next two months. My goal is to save an extra Kshs 40,000 in the next two months. I want to make a lump-sum payment towards my loan (balance currently is Kshs 100,000), with a goal of clearing it in 6 months. What is your goal? Why are you saving? Write this down in a sticky note and place it where you will see it every day. Mine is on the wall next to my bed. 

How it begins. At zero savings, but with a plan in mind

In the next post we will talk strategies that will help us achieve our goals.

This blog’s mission is to help us build better financial habits and reach our financial goals fast. For this series of posts, I am partnering with Barclays for the Barclays Savings Challenge. Share your comments using the hashtag #AfricaSaves.

This article is the first in a series of sponsored posts for the BARCLAYS SAVINGS CHALLENGE. I hope the challenge will be as interesting for you as I hope it will be for me. You can follow the discussion on Twitter and Facebook and share your own experience by using the hashtag #AFRICASAVES. Visit https://savings.africa.barclays/  for useful savings calculators and information on their savings accounts.