Combatting Financial Mindlessness
When purchasing art supplies for my most recent art class, I bought every item on the supply list instead of looking through the supplies I already own to see if there were any duplicates. And when I was putting away my new supplies, I realized that I bought a second eraser that I didn’t need.
It was a $2.85 mistake that I can surely afford to make. But it was an unnecessary purchase that I made because I was acting mindlessly. I wanted to buy my art supplies without interruption, and so I did. Even though I knew it was likely I already had some of the supplies, it was much more fun to gather items into my digital shopping cart.
This was just my most recent example of mindless spending. I was having fun thinking about my upcoming art class, and took my mind off my money.
What Is Financial Mindlessness?
While we can all point to specific examples of our own mindless behavior, mindlessness as a whole can be difficult to recognize in ourselves and our culture. This is in part because our culture is set up to reward mindless behavior. For instance, online retailers helpfully offer to remember your credit card information to speed up the checkout process in the future. At the same time, marketers target our basest fears and desires in the hopes that we will respond without thinking.
But just because mindlessness can be tough to pinpoint does not mean it is impossible to do so. Ellen J. Langer, author of the book Mindfulness, offers an excellent and succinct definition of mindlessness that can help you to understand what is missing when you are behaving mindlessly. According to Langer,
“When [acting mindlessly],…people treat information as though it were context-free—true regardless of circumstances.”
Reacting mindlessly means that you are acting on decontextualized information. A simple example of this is when you are eating popcorn at the movies. You start with the information that hot, buttered popcorn tastes delicious. But you are missing the context of how your body feels as you are eating the popcorn, because you are so focused on the lawman beating up the wrong guy on the silver screen. By decontextualizing your eating, you continue to eat the popcorn long after your body has signaled that you have had enough.
Financial mindlessness comes from a similar lack of context. My art supply shopping spree did not consider the context of what art supplies I’ve already purchased. But financial mindlessness can have graver consequences than just duplicating an art eraser.
Let’s say you allow your aging parents to pick up the tab at dinner. You are acting on the information that “Mom and Dad pay for dinner,” since that has always been true. But you might be ignoring the context of their financial situation, even if your dad has mentioned that his pension is not going as far as he expected. Without meaning to, you may be ignoring the new context of your parents’ financial lives now that they have retired.
Similarly, someone engaging in retail therapy after getting laid off is acting based on the information that buying stuff makes them feel good. They’re ignoring the financial context of their current shopping binge and simply acting based upon how good shopping makes them feel in the moment. By reacting mindlessly to being laid off, the retail therapy practitioner won’t find a solution that will help them feel better long-term.
Once you understand that your mindless money behavior is a result of decontextualizing information, you can more easily recognize and identify the context that you are missing when you are reacting mindlessly.
Identifying Context
So how do you recognize the greater context of your financial decisions? This can feel like an impossible question, since context is often invisible to us. (Remember the old story about the fish that is asked how the water is , to which it replies, “What the hell is water?”)
But even though you swim in almost-impossible-to-perceive financial context all the time, you do have the ability to identify that context and adjust your financial decisions as a result. It’s a matter of stopping and asking yourself some important questions.
In particular, the following questions about spending can help you to better understand the context of your spending choices:
Are there people or situations in your life that cause you to spend more than you intend?
Can you remember any stressful events that occurred around the same time that you overspent?
How did it feel to spend this money at the time of the purchase? How does it feel now?
Were there purchases that felt good in the moment that you still feel good about? Why do they feel good?
You can adapt these questions to any kind of financial decision to help you better identify the context of your mindless financial behavior.
Mindlessness vs. Automatic Behavior
While curtailing your mindless financial behavior, it’s important to recognize that mindlessness is not the same as automatic behavior.
For instance, when you learned to drive, you had to think about every movement as you learned to accelerate, brake, steer, signal, shift gears, turn, and merge. Nothing you did was outside of your intentional thought, because the process was new and complex. Over time, however, your driving skills have become automatic, so that you do not have to give conscious thought to the process of driving as you commute every day.
It’s very helpful to be able to drive without using conscious thought at all moments. But as beneficial as automatic behavior can be, it becomes mindless and disordered without context. For example, if a new stop sign is installed at an intersection where there was none before, you may find yourself mindlessly sailing through the intersection because of your decontextualized automatic behavior. This means your intention of driving safely has been thwarted by your decontextualized automatic behavior.
Your goal should be to create intentional automatic behavior, rather than mindless automatic behavior. In fact, intentional automatic behavior is a good way to support your financial goals.
For instance, you might set up automatic transfers into your savings account or retirement account as an intentional automatic behavior. But your defaulting to buying lunch at the cafeteria at work would be mindless automatic behavior.
The Importance of Context
No decisions we make occur in a vacuum. And, in fact, we often ignore the emotional context of our choices in an attempt to be more rational. But recognizing the full context of our financial decisions can help us to make better ones.
It’s only with an open and compassionate understanding of context that we can truly understand what choices we have, why we make the ones we do, and how we can opt to make better ones.