Why austerity is so difficult: ‘We like to bury our heads in the sand’ | NOW

Now that everything is becoming more expensive and purchasing power is decreasing, it is becoming increasingly important to take a look at your spending pattern for yourself. But economizing is not easy because it goes against what your ancestors were taught: keep what you have.

Why we save less quickly than is actually good for us has to do with behavior that has developed through evolution. This is what Martijn van den Assem, professor of finance at the Free University of Amsterdam, specializes in human voting behavior.

“We find it hard to give up something we already have. We go for short-term gratification and like to bury our heads in the sand when there is possible bad news,” he says.

According to Van den Assem, we as humanity have learned this in order to survive. “In the Stone Age, if you lost your ax or your food, it could kill you. We have an aversion to losing what you have because of that. And the future was uncertain back then anyway, so we had to get , what was in it and was mostly engaged in short-term planning.”

“We value the present more. We succumb to temptation again and again.”

Martijn van den Assem, professor of finance

Taking a step back is annoying

The National Institute for Budget Information (Nibud) gives people all sorts of practical tips to save money. Yet we don’t always follow them. According to Van den Assem, it has to do with our behaviour.

Take the tip to buy fewer A brands as an example. “People get satisfaction from buying an A-brand. Sometimes the quality is better, but it’s also the prestige that comes with such a purchase. Taking a step back from what you’re used to is more annoying than if one had never had.” says the professor.

More importantly, we pay too little attention to our future needs. We focus primarily on the present, says Van den Assem. “This is why, despite good intentions, we find it so difficult to stop smoking, eat less or save enough for retirement. We value the present more. We give in to temptation again and again.”

The brain is particularly bad at looking ahead, says consumer psychologist Patrick Wessels. “The brain unconsciously assumes that any setbacks that exist now will not happen in the future. And that next week or next month we will have more time, more money and more energy than we have now.”

“It’s a kind of overestimation that comes from optimism,” he continues. “That’s a good thing because it allows us to take risks, make progress and embrace new ideas or activities. Unfortunately, it also means that financial planning is difficult for many people.”

The scheduler checks the executor

We behave like ostriches, says Van den Assem. “If we can prevent an unpleasant feeling, we do it. It is very human. It is difficult to change the behavior that is in our DNA. But unlike animals, we are also born with the ability to think about our own behavior . We can use that talent to our advantage.”

“Each of us has two selves fighting against each other: the planner and the doer. The doer seeks short-term gratification. The planner thinks ahead and is the voice in your head that says, “Don’t do it, not good for you .’ The smart side is smart enough to slow down the unwise side.”

The fact that everything is now more expensive than before is finally an incentive for us to act, Wessels believes. “The brain doesn’t like to lose, so you shouldn’t lose the extra euros either. That’s why even a relatively small increase can get people going. Every time someone goes shopping, has something to eat or drink or goes shopping, it says on out. a lot of media attention. It makes people aware, so more financial and then more uncertain or even more worried about the financial future. It helps in the short term to keep the budget under control.”

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