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Updated: Mar 14, 2024

How to Overcome Your Biggest Financial Blocker

Restraint bias: one of the least talked about and sneakiest ways we can get into financial trouble. Here‘s how to identify and conquer it so you can reach your goals.
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I’m currently on hour two of procrastinating. After sorting through laundry, watching reality TV, and browsing the internet, I’ve convinced myself to sit in my chair and get to work.

Working from home is a constant battle of wills. When distractions are easy to find, I’m discovering my ability to restrain myself is limited - or non-existent. I know I don’t want to fill my weekend with work, but even that isn’t always enough of a deterrent to putting things off.

Before taking the deep dive into freelance life, I thought my productivity levels would be through the roof. I believed I was one of the few who could buckle down and tune everything out whenever necessary. I banked on being able to churn assignments like a boss. But it turns out my belief was much rosier than my reality.

According to a study headed by Loran Nordgren from the Kellogg School of Management, restraint bias could be to blame:

“They found, generally, people have a restraint bias: the tendency to overestimate one’s capacity for impulse control. Restraint bias causes people to miscalculate the amount of temptation they can really handle, which in turn leads to a greater likelihood of indulging impulsive or addictive behavior.” (Kellogg Insight)

The study found restraint bias to be a driving force when subjects determined their ability to avoid eating a snack or smoking a cigarette. But there are plenty of other areas where it could be at play.

Like our finances.

Armed with a “strict” budget for my recent home remodel, I thought I could turn down extra projects and purchases that would increase costs. I believed in my ability to keep things contained and within the original scope.

I was clearly operating with a restraint bias, and I have the receipts to prove it. One small, unplanned purchase turned into two and so on. If someone had told me to double my budget at the get-go, the answer would have been an easy “no.” But my willpower faded quickly after being confronted with a million smaller purchases. And when faced with an upgrade, I found myself saying, “why not” more than “absolutely not.”

But after crawling out of the remodeling trenches, I can say I have a new understanding of my money triggers. I know I am better at big picture planning, not everyday expenses. I also now recognize certain restraint biases I carry. In this future this will allow me to base decisions in reality, not a warped sense of the level of temptation I can handle.

Here are some tips for pinpointing your restraint biases to create positive financial change.

How to Find Your Restraint Biases: Tap Into Your Triggers

If you are completely uninterested in buying clothes, you could easily say you aren't tempted by department stores. Clothes aren't a trigger for you, so that’s likely not where your restraint bias lies. Instead you might find yourself triggered to spend more on food. Maybe you dine out as a treat for a long day at work.

Pinpoint where you get that spending “itch” and that could be where you are overestimating your ability to keep your money in your wallet.

These triggers could even be less purchase-specific and more emotion-specific. For example:

  • You spend because you’re struggling.

When you’re feeling down, you tend to go in search of the rush of dopamine you get after making a purchase.

  • You spend to treat yourself.

Whether you reached a goal or muscled through a tough day at the office, you find the best way to treat yourself is buying something.

  • You spend because you’re bored.

There’s nothing that can perk you up like a new purchase - which makes shopping your go-to solution for boredom.

Questions to Ask Yourself

Take a deep dive into the purchases or life moments when you have been pulled to spend money:

Our biggest triggers lie in these “repeat” offenders. At some level you likely know what these are without taking a deep dive. But these questions can pull down the veil and really help you see where restraint bias might be lurking.

Fix Triggers by Finding Ways to Give Your Willpower a Break

Many of us were taught to believe the best in ourselves, but restraint biases tell us this might not be the best mindset to operate from. After all, believing we are able to resist the urge to spend is what has led to many an unplanned purchase.

When you understand your triggers, you can better understand the situations you should be more mindful about steering clear of. For most of us, willpower is not our strongest muscle - not by a long shot. It’s often in our best interest to avoid situations where we require our willpower to work double time.

Say you have a sweet tooth but you’re determined to kick the habit of eating a handful of cookies after dinner. Simple willpower is likely not enough to get you over the initial hump of breaking the habit. If the same cookies are in the same place in your house, even walking past them could prove too much temptation to bear. This is the case even if you believe in your ability to reach for something else instead.

Opt to not have cookies in the house at all, and your chances of breaking the habit improve. If giving into temptation requires a drive to the grocery store, there’s a good chance you’ll focus your energy elsewhere.

When it comes to spending, it’s not just about the inner mental struggle. It’s also about the triggers placed by those who want you to spend. And virtually every store with something to sell falls into this camp.

According to Psychology Today, grocery stores are big culprits for finding ways to reaching into your wallet. From placing food staples at the back of the store to ensuring bananas have the right eye-catching coloring, your brain is constantly being bombarded.

So if grocery store trips are your spending trigger, you would be better off coming armed with a detailed list. You might also squeeze a trip into a limited time block to avoid wandering through the aisles. This can make relying on your willpower less necessary and keep you from making impulse buys.

Accept Your Shortcomings

When I battle with myself to stop giving into distractions, I also struggle with the feeling that I’m not succeeding at self employment. I create an internal monologue that I says I have a shortcoming that no one else in my position seems to have.

I know that’s not the case. I can even recall conversations I’ve had with others in which we talk about common, work-from-home pitfalls. But logic doesn’t always have a seat at the table.

This bashing session I put myself through only perpetuates my restraint bias. I find myself thinking, "I can make this happen if I just try harder and stop making up excuses." That might be accurate on some level, or I might be overestimating my ability to concentrate when I just need to recognize the other factors that might be at play. Removing myself from my environment could aid my brain in draining out the distractions.

A Few Things to Remember When Overcoming Restraint Bias

  • Change comes after acknowledgement.

We can’t change something we don’t acknowledge as a potential issue or hurdle. Recognizing spending pitfalls is a HUGE win. That means you see where you can apply solutions and see tangible results.

  • You aren’t the only one who struggles.

Financial issues can feel shameful at times. But if we were honest about the struggles we have, that shame would dissipate. You aren’t the first person to be in this situation and you won't be the last. Period.

  • Small changes can lead to big results.

Good financial habits are formed by a series of small choices. Shifting the circumstances around those small choices and setting yourself up for success can lead to big changes.

  • A lack of impulse control doesn’t spell doom.

It’s not a lack of impulse control that can wreck your finances - that’s something everyone deals with at some point or another. It’s not recognizing when or where that lack of impulse control is strongest that could potentially wreak havoc.

Remember: We Are All Works in Progress

Life is a constant practice of going back to the drawing board - as is our finances. So you set a financial goal or tried to break a certain habit and failed miserably. Great! Now you have more data to pull from next time you try something out.

We are all a work in progress. Every single last one of us. That means every aspect of our lives will reflect that at some point. What you struggle financially with now might not be what you will struggle with in ten years. Believe it or not, that’s progress.