Why Is It Psychologically Difficult to Be Financially Responsible?

by Emily Guy Birken · 10 comments

thinking about finance

Financial success is a little bit like fitness — we all know what we should be doing, but for a lot of us, ramping up our retirement savings and jumping on the treadmill are two things that just don’t happen.

Even though making the rational decision to save or exercise is in our best interests, it’s awfully difficult to make the right long-term decision in our day-to-day lives. The question is, why? When we all know the right decisions to make, why is it so difficult to make it happen?

Psychologists and behavioral economists have some answers:

psych and money1. Delayed gratification is really tough for a lot of people.

Whether or not you are able to delay gratification may be hard-wired into your brain. The now famous Stanford “Marshmallow Experiment” studied the ability of pre-schoolers to hold off on eating a marshmallow — when they knew that they would get a second treat if they simply waited fifteen minutes.

Of the 600 test subjects, some ate the marshmallow as soon as possible, many tried to wait and found they couldn’t make it the full 15 minutes, and some were able to distract themselves for the full time period.

Though this study was conducted in order to determine what age children began practicing self-control, it was the follow-up studies that have huge implications for adult behavior. When revisiting the same test subjects as they grew up, researchers found that those individuals who were able to delay gratification as a preschooler became successful adolescents and adults. They were simply wired to be able to distract themselves from in-the-moment temptations while keeping their bigger goal in mind.

Even if you’re a “eat the marshmallow now” kind of person, you can still make good long-term decisions. The trick is to automate savings and plan ahead for times when you know you’ll be faced with temptations so that you have a plan for how you will handle it.

Make good decisions before you’re presented with the metaphorical marshmallow, and it will be much easier to stay on track.

2. You have a financial comfort zone—and it’s difficult to break out of it.

According to financial psychologist Brad Klontz, a Financial Comfort Zone (FCZ) is “the socioeconomic level that feels the most familiar to you…[and] the boundaries of your FCZ are anchored by a core set of financial beliefs and behaviors.”

For example, your attitude toward people who are richer or poorer than you is part of your FCZ. If you have the unconscious belief that wealthy individuals must be greedy, that is not only a part of your comfort zone, but it is a belief that is holding you back.

If you’ve ever wondered why a recent lottery winner finds himself broke after a couple of years, or why a laid-off worker can’t seem to slow his spending down, it’s because of the nature of the FCZ. In both cases, changing one’s money habits would involve a huge shift in thinking about money, as well as a change in relationships.

Though we may not like to discuss it, suddenly having more or less money than one’s contemporaries will strain those relationships. This is part of the reason why it can be so difficult to break out of the FCZ.

Making certain that you examine your belief systems and your relationships to see if they align with your financial goals will help you to determine if your FCZ is holding you back.

The Bottom Line

Our relationship with money is a complicated beast, and allowing our habits and unconscious assumptions drive that relationship is no way to build wealth. Taking care of your finances, like taking care of your body, is something that you have to do despite the many excuses your mind can come up with.

David’s Note: Developing the discipline to be responsible is tough, but it can be done. Look around you, and if you can’t find inspiration, move further away and look harder.

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{ read the comments below or add one }

  • DNN says:

    People get spending happy.

  • Shane says:

    You could also point cause to learned behavior. When children grow up without having to save to get things they become apart of the generation that is used to instant gratification.

  • Alisa @ IVA says:

    Monet matters should be taken into careful consideration while paying or receiving. One more thing that one should note is that to save money you do not have to hire a money manager, you can do it on your own by saving up and cutting your budget from the desirable wants.


  • Jean says:

    I did not know about the term Delayed Gratification but I do practice it a lot, perhaps a bit too much. Say I buy a bar of chocolate and keep it in the fridge. My family members (all grown adults by the way) will usually consume it faster than me. Not that they are unfit or anything, in fact even fitter than me but I just can’t seem to be able to not keep a bit for later, even though there’s no real need to as I could also pop over to the store for some more chocoloate.


  • Trent says:

    Could we also add to the mix “keeping up with the Jones'”? Although, it’s somewhat linked to the FCZ, it deserves its own point, as it’s a massive motivator in spending habits – especially with Apple products 😉

  • zoedebtstory says:

    It’s very interesting study of Stanford “Marshmallow Experiment”, the patience of waiting for the best thing, I think its can apply for personal finances management.

  • Marbella says:

    I think the number 2 in my case, I’m a little let go, but good control of my finances and do not take any loans or high risk.

  • Mimi says:

    Delayed gratification only works if the goal is still attainable later. If you tell child they can have 1 marshmallow now or 2 marshmallows if they wait 15 minutes, then refuse to give them any marshmallows after they wait, the child will learn that waiting produces only lost opportunities.

  • James says:

    No. 2 is most applicable to me. I can handle delayed gratification.

  • Dave, Financial Conflict Coach says:

    Financial Homeostasis and Social Boundaries are power motivators. Reactions can come from you or the people around you. That’s why so many people who try to do something new feel like they’re being pulled back by their loved ones.

    These people aren’t trying to be negative, it just seems that way once your focus differs from theirs.

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