Brain to blame for dodging 'painful' financial decisions
15 January 2018
While the vast majority of Australians are concerned about their financial future, it seems many of us are not in a hurry to do anything about it and our brains might be partly to blame.
According to the Suncorp Cost of Procrastination Report, two thirds of Australians procrastinate about making financial decisions, despite 85 per cent being concerned about their financial future.
The top dawdling activities include establishing a budget, savings plan and prioritising expenses into needs versus wants, and Suncorp Behavioural Economist, Phil Slade, said this is somewhat due to the way our brain works.
"Managing our finances is actually very emotional, even though we approach them with very rational thinking and use unemotional tools like spreadsheets," he said.
"The simple act of looking at our finances conjures a variety of feelings - confusion, disappointment and even fear of the future. As our brains are hard wired to avoid pain, we become naturally resistant to any money-related tasks.
The report, the latest in Suncorp's Cost of Living series, revealed seven in 10 people in the sandwich generation (35 – 54 years) admit to regularly or always procrastinating about their finances, closely followed by 69 per cent in the younger generation (18 – 34 years). Retirees (55+) are the least likely to procrastinate.
"The good news is this can be overcome. Set your own deadlines; acknowledge the emotion behind financial decisions; and be aware of your spending patterns, not just how much you're spending," Mr Slade said.
The report also found while top financial concerns varied by age, the most common included being able to manage unplanned or sudden expenses, affording the ideal lifestyle retirement and making mortgage repayments or getting into the property market.
Suncorp's EGM Stores and Speciality Banking, Lynne Sutherland said regardless of age, these findings reinforce the importance of being proactive with our finances.
"To feel financially confident, we need to be motivated about money, or at least the benefits of positive money management and put plans in place," she said.
"In a lot of cases, procrastination can be linked to not knowing where to start or being ashamed to ask for help. Money can be confusing, but there are so many options available to help people regain control of their money.
- You're prone to convenience transactions which tend to occur on occasions when you're running late, you're unorganised, missed a deadline, or simply forgot something.
- You pay your bills late which leads to late fees and interest
- You buy gifts at the last minute and tend to be less price-conscious because you feel pressured to buy something quickly
Media Contact: Ashleigh Paterson 0407 925 665