Difference between what you Know and Do

Health is wealth is one of the most frequent terms we learn when we are young children. We keep hearing it even when we are older in college and later.

We know it very well.

We understand it very well.

But we ignore it when it comes to our own health.

Why? Because we dont necessarily put into action what we know .. we dont practice what we preach.

In the same way, we understand the importance of financial planning, we understand the difference between want and needs , but we dont put into action our learnings.

Why is it so difficult for us to put things into action?
I am reading this book called " The Power of Habit " right now. Have covered a some 30 pages and it gives some insights onto why we have these habits that continue to push us in a direction even though we know differently.

Its to do with a clear goal and reward mechanism.. rewards both physical as well as neurological in nature. The neurological taking precedence over the physical aspects.

These understanding of neurological signals in our brain is used by marketeers to help nudge us to buy things they want us to purchase. These are subtle signals using the goal and reward mechanisms.

Each time your brain recognises the neurological reward, it craves more for the same reward and looks for those signals.

Once we understsnd this it becomes important for us to build those goal and reward mechanisms that help us achieve where we want to go.

In our own financial world , identifying those signals , the subconcious ones will help push us to the right structural changes in our behaviours and build the right habit.

Lets take an example.
Let us say you are saving some money for a goal... say buying a car.  Everytime you put some money towards it.. ( ensure the transfer is automatic) ... dream a little.  Think about you getting closer to the goal and feeling the intense satisfaction of you giving the money and buying your new car. Think about how comfortable you feel when driving your new car. Think about how much fun you are having when moving out with your friends.

Get your brain the feel those rewards. Automatically the brain will crave for those positive reward feelings and force you to move towards your habit. When you dont save, you will not feel pleasant.

Understanding nature and putting it to good use for your own benefits is a key success lever. Use it well.
Thats simplefinancialsense