3728: The Real Reason Why You Can't Break Your Bad Money Habits by Jen Hayes on Money Mindset

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[00:00:54] This is Optimal Finance Daily. The real reason why you can't break your bad money habits by Jen Hayes of jenhayes.me. And I'm Justin Malek. And we're going to jump right into today's post as we optimize your life. The real reason why you can't break your bad money habits by Jen Hayes of jenhayes.me.

[00:01:22] Dave Ramsey says that, quote, personal finance is 20% head knowledge and 80% behavior, end quote. In other words, you can know everything you need to know in order to succeed financially, but if you don't actually do these things, you won't achieve financial peace. I see this all the time. Someone knows exactly what they need to do to fix their financial mess, but they don't actually do it.

[00:01:50] Instead, they keep engaging in the same bad habits like overspending or ignoring their budget. Why do people do this? Most of us live on autopilot. When we aren't intentional with our finances, we do what's familiar. We engage in the same patterns and bad habits over and over again. When we try to break these bad habits without understanding why we do them in the first place, we fail. Why we have bad habits.

[00:02:21] Our brains are wired to avoid pain and pursue pleasure. This isn't always a bad thing. Our aversion to pain is what keeps us from doing harmful things like putting our hands on a hot stove or walking in front of oncoming traffic. Avoidance of pain keeps us alive. The problem is that our brains don't understand the difference between physical and emotional pain.

[00:02:46] Whenever we feel emotional pain, our brains try to avoid it, even though this is unnecessary and actually makes things worse. Brooke Castillo, founder of the Life Coach School, created a model that helps to explain how our feelings drive our behavior. The model looks like this. Thoughts lead to feelings. Feelings lead to actions. And actions lead to results.

[00:03:13] Brooke theorizes that bad habits are rooted in a desire to avoid negative emotion. We engage in the bad habit to attempt to dull or lessen an unpleasant emotion that we are feeling. Remember that your brain sees negative emotion as a threat and wants to avoid it. Think of someone who is an emotional overeater.

[00:03:35] Whenever that person feels lonely, sad, anxious, frustrated, or another negative emotion, she overeats. She does this because she thinks she'll feel a little better if she eats. It dulls the negative emotion she's experiencing. We do this all the time and we're usually not even aware of it. This is at the root of many bad habits such as binge drinking, being addicted to social media,

[00:04:02] overusing our smartphones, overusing Netflix, and overspending. We engage in these behaviors to try to escape from our negative emotions. Bad money habits. Let's look specifically at overspending. If you try to stop overspending but you don't understand why you do it in the first place, you will probably fail. You need to address the root cause of your overspending problem.

[00:04:30] The root cause is your thoughts which determine your feelings, which create your actions, which lead to your results. Let's say you are trying a spending ban but you are having many negative thoughts about it. You might be thinking, this is too hard. I don't want to do this. Everyone else gets to have fun and spend money. Why can't I have what they have? If these are the thoughts you're having, you may feel frustrated, jealous, and deprived.

[00:04:59] You don't like feeling these negative emotions so you'll be tempted to engage in a behavior that will help you to dull the unpleasant feelings, possibly overspending. The result is that you don't stick to your spending ban. Changing your thoughts. In this example, if you want to break your bad habit of overspending, you need to work on changing your thoughts. Instead of thinking, I'm so deprived, you could try thinking, I have everything I need.

[00:05:29] Getting out of debt is my top priority right now. Or any other thought that will create a positive emotion for you. If you feel a positive emotion such as gratitude or motivation, that will drive you to stick to your goal and get the results that you want. Remember that changing your thoughts from very negative ones to more positive ones won't happen overnight. It will take some time. Our brains like to be efficient. So they get stuck repeating the same patterns.

[00:05:59] If you're used to thinking negative thoughts, that's what your brain will default to. Pay attention to what you're thinking. Objectively observe it. Understand why you're thinking what you're thinking, and then you can begin to work on changing it if you want to, which will require some time and patience with yourself. Feeling your emotions. Let's look at an entirely different scenario. Perhaps when you overspend,

[00:06:28] you aren't having negative thoughts about money. Maybe your negative thoughts are about something else. For example, maybe you had an argument with your spouse and you feel angry. Perhaps you had a bad day at work and you're feeling unappreciated. Maybe someone you cared about moved away and you're experiencing loneliness. These negative feelings may drive you to try to cheer yourself up with overspending. I saw an example of this on the TV show Tidying Up with Marie Kondo.

[00:06:57] A woman had accumulated insane amounts of clutter, mostly clothing, because every time she and her husband had a fight, she'd go on a shopping spree and buy new clothes. How to stop. If you find yourself engaging in bad financial habits for reasons like this, Brooke Castillo would recommend that you learn how to experience your emotions without reacting, resisting, or avoiding them.

[00:07:25] Of course, you can also change your thoughts, which dictate your emotions. How does this work? Follow these steps. Number one, when you experience a negative emotion, name it. An emotion is one word such as anger, sadness, or anxiety. If you start describing it with numerous words, that's a thought you're describing, not an emotion. Say to yourself, for example, I'm feeling anger. Number two,

[00:07:55] next, notice how that emotion feels in your body. If you're feeling angry, you might have a flushed face or a clenched jaw. Number three, experience the emotion. Don't try to escape it by engaging in a bad habit or resist it. In the example of anger, resisting could mean yelling at someone. And number four, move on. When you allow yourself to truly feel an emotion

[00:08:23] instead of resisting it or avoiding it, you'll probably find that the emotion isn't that bad and it will pass. Breaking bad habits. In short, we engage in bad habits because of our thoughts, which create our feelings. We do our best to dull our negative emotions with overspending, overeating, overdrinking, and a number of other vices. If you'd like to break a bad habit,

[00:08:52] try one of these two techniques. Change your thoughts, which will change your feelings or feel your feelings instead of trying to avoid them by engaging in a bad habit. Changing a bad habit won't be easy and it won't happen instantly. When a thought has become so ingrained in us, it'll take some time to change it. Be patient with yourself. You will get there.

[00:09:22] You just listened to the post titled The Real Reason Why You Can't Break Your Bad Money Habits by Jen Hayes of jenhayes.me. I'll be right back with my commentary. Back in 2010, I started tracking every penny coming in and going out in a spreadsheet. Back then, I wanted to know where my money went. These days, I'm thinking more about where I'm headed. Monarch makes that easier by putting my accounts, investments, spending, and savings goals

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[00:10:21] Use code optimal at monarch.com to get your first year of Monarch Core half off at just $50. That's 50% off your first year at monarch.com with code optimal. You're listening to a quick ad. You know what else is quick? Selling your car on Carvana. Just put in your vehicle information and we'll give you an offer. Done. Jen, no hassle, no negotiation, no guy from an online listing lowballing you. Which means by the time I'm done

[00:10:51] explaining this, you could have basically done it. Still haven't started? Hey, better late than never. Sell your car today on Carvana. Pickup fees may apply. Thank you to Jen. I appreciate that she gives us an option besides trying to talk ourselves into a better mood. With her example of having a bad day at work, maybe you really were treated unfairly. You don't have to decide that it was fine or that

[00:11:21] you should be grateful for it just to avoid buying something. You can still be upset about what happened. And you can decide that you don't want to spend money because of it. Those two things can both be true. Even if you'd much rather feel better right away. I think that's an easy part of this to skip. We hear about changing our thoughts and then we give ourselves another thing to get frustrated about. Now we're spending too much and we're not being positive enough.

[00:11:50] But Jen's second approach doesn't ask you to come up with a positive thought. It starts with being able to say what you're feeling. And if you try that and you're still upset afterward, I wouldn't automatically call it a failure. If you recognized what was happening and didn't make the purchase you were about to make, that's already a change in the habit. Even if your mood hasn't caught up yet. So thank you to Jen for walking us through this. But I'll leave it there for today.

[00:12:19] Thank you for listening. Have a great rest of your day. I'll be here again tomorrow as usual where your optimal life awaits.