Psychological Sabotage and Monetary Decision Making: Self-Awareness Can Help
At one time or another everyone makes an unsound decision. We can improve our decisions by examining what led us in the wrong direction, which often leads us to discover that it’s our own psychological sabotage which led us astray. In other words, if we increase self-awareness by examining our decisions, then sounder decisions will ensue. Sounds pretty simple, but it requires understanding the underpinnings of our psychology. Were these faulty decisions based on buried habits? Family matters? Past mistakes? Do we use mental short cuts or set our goals too high or too low? Do we draw on examples that don’t really apply to us?
All of these elements effect our decision making process. And in regard to monetary decision making, they can cause over or under confidence, create social pressure, and cause us to act in an economically self-sabotaging way, causing guilt and even shame. We don’t take the time to understand our goals and our feelings, and we let unpleasant feelings or circumstances pull us in a direction that may not be the best.
Money is an area of life that’s often stressful. We need more, we have too little, we want more, we can’t reign in our spending, we have unexpected expenses, our investing is made with too little awareness or on impulse. We procrastinate on assessment of options, or we don’t follow through. Self-awareness will help us to attract wealth and financial stability, by allowing us to analyze and recognize our financial goals and stop ourselves from over or under reacting.
A good example of psychological sabotage is the volatile stock market. Investors over-react, sell or buy impulsively. Acting first and thinking later can be a financial disaster.
Self-awareness is based on understanding and analyzing our needs and desires, and then taking action rather than procrastinating, in order to achieve them. Our beliefs stimulate and effect our actions.
In regard to monetary self-sabotage, the best way to avoid it is to look at the psychological reasons we may not believe you can succeed. Do you think it’s impossible or difficult to attract wealth? Do you believe that all decisions should be made without weighing the options and consequences? Are you all about the moment, with little regard to the future? And of course, why do you feel this way? Did a parent or sibling tell you that you weren’t ‘good’ with money? Do you feel unworthy of having investments? Does it seem too ‘hard’ to understand the ins and outs of investing or the fluctuations in the marketplace? Most importantly of all, what do you really want to achieve this year, and how are you going to make that happen?
Becoming self-aware in regard to monetary decision making means you’ll need to ask yourself these questions, in financial terms.
Instead of justifying your limitations, set up an action plan. Write down your financial goals, and review them, consistently. Seeing where you are within the framework of reaching financial goals will effectively excise the sabotage. You can’t be organized and focused and at the same time be unaware of any negativity that you’re bringing to the financial table.
Setting goals for your financial future will also help you to overcome procrastination and be more productive, too. Making decisions based on clear thinking will follow.
In empirical terms, this kind of self-awareness and goal setting will help you to stop spending too much and saving too little, or conversely, clinging to a small nest egg instead of investing prudently, or thinking outside the box in regard to business and financial goals.
Sure, it’s easier to fall into the same old self-sabotage traps, and tell yourself it’s too difficult to make an informed decision or plan your financial future. But long term, you’ll see goals realized and monetary peace of mind.