Willpower – The Little Engine that Could

I keep reading the argument that people have too much going on to worry about their money. My response? If you worried about your money more, you wouldn’t be running around like a crazy person!

I just read a post by Ramit over at I Will Teach You To Be Rich and it struck a chord with me. The post talks about the importance of automating transactions to do the right thing be default. This is good, but what if you don’t have an extra $100 a month to move to a savings account? You need willpower and you need it now!

If you’re spending too much, too often on the wrong things, then personal finance is ABSOLUTELY about willpower. It’s about changing habits. If you’re automating a transaction to put money out of reach, that doesn’t change the habit. It just moves the location where you will go to get to your money when you want to spend it. For example, Ramit wrote:

If you think personal finance is about trying harder, ask yourself: How has that worked for you in the last month? The last year? Have you really saved more? Invested more?

With the problem we’re talking about though, trying harder is the wrong thing to attack here. If you’re trying anything, then you’ve got willpower. The point to attack is WHAT are you trying harder AT?

You need to change the desire to spend if you truly want to change the fact that you’re not saving. Willpower is required to make such a change. There’s no way around that. If you have willpower you’ll find a way to keep pushing. You’ll find another option out there. Maybe it’s a cheaper replacement for a necessity or cutting out something from your budget that you don’t actually need. That type of analysis will start the engine and willpower will provide the fuel.

One more general point – there’s a fine line between automating payments and “setting and forgetting”. If you want to stop losing money, start saving more, start making more, etc. You need to start PAYING ATTENTION to your finances. You need to learn how to manage money. Creating an automatic transfer doesn’t teach you anything. It just moves your money around when you’re not paying attention. If you don’t change your spending habits, you will find the money you have and you will spend it. Your habit will see to it that it tracks down what it needs. In this case, that’s your cash.

Change the habit and you will learn the importance of saving and investing.

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