December 1, 2017
February 14, 2018


As the world gets faster and technology improves: we are losing touch with our money. What can we do to take our financial power back?

The human mind is one of the most complex and powerful things this world has ever known. When nurtured and cared for it can produce remarkable ideas that can be harnessed to make the world better. It can also be manipulated and twisted to serve a purpose. Companies have learnt how to use our thoughts and impulses against us. To a point where being a consumer in the 21st century is a tremendous challenge: a minefield of tricks and distractions.

Companies have designed their marketing to use our behavioural biases and emotional biases against us. As human beings, we only have a finite amount of willpower. When we wake up in the morning and start making decisions, this willpower starts depleting. After a long day at the office, our willpower supply is completely depleted. This is when they pounce.

The most basic tactic is temptation alley at the supermarket where they surround us with sweets, snacks and cold drinks. The next time you are standing in the cue at the shops after work have a look at the people around you. Many of them have started to drink something from the shop or are eating something from the bakery because they are hungry or have snaffled a few chocolates for later. This is no coincidence. When we are hungry and tired (no more willpower) our decision-making ability is impaired (as discussed in Thinking Fast and Slow by Daniel Kahneman). Companies understand this and shops are designed to use our lack of willpower against us and to tempt us to spend more. On the topic of companies wanting us to spend more: the banks are taking it to a whole new level.

Whenever we use a bank card to make a purchase we are effectively disconnected from our money. Yes, we get a message from the bank saying how much we have spent and how much is left in our account, but when we look at the amount that has come off, it doesn’t seem that bad, and looking at the balance always makes it seem like we have plenty of money left. Banks encourage us to use virtual money for just this reason. They want us to lose touch with how much we are spending. Further to this they incentivise us by giving us purchase rewards points so that we spend more and more using our cards (and not cash) and are “rewarded” for it. When we have spent all our money they offer us personal loans and credit cards so that we spend even more. Then, once we have accumulated all this terrible debt and we want to purchase a home using a mortgage bond they give us ridiculously high interest rates because they see us as a risk. It’s a never-ending debt spiral and if we are not careful, and do not use debt responsibly, we can land up in a massive debt hole.

Banks have now started issuing bank cards that have a tap system built into them. Below a specific limit we merely must hold our card above the card machine and *beep*, our purchase is done. No pin code required. No time to think twice. It is instantaneous and evil. Online shops encourage us to preload our credit card details to make impulse buying that much easier. Amazon has a Buy-with-one-click feature. There is a button on the right-hand side of the page. *Click* and your purchase is done. No pin codes. No prompts (are you sure?). No second thoughts.

Nobel Prize winner Daniel Kahneman in his book “Thinking Fast and Slow” describes the brain as having two systems: The Fast system and the Slow system. The Fast system is the first system the brain uses (The first line of defence). As the name suggests: it is quick, impulsive and emotional. Kahneman describes our brain as lazy, relying principally on the Fast system to make decisions. The Slow system is the deep thinking and more rational of the two. It is only activated (Woken up) after some time, however. The Fast system is not all bad. It is the system that will react in a split second, causing us to pull the steering wheel of the car hard left thereby saving us from a potential car crash. However, it is also the system that will cause us to react in a split second, whip out the credit card or Buy-with-one-click: causing a financial car crash.

The solution to this is that we need to get in touch with our money again. To get in touch with your money, break up your spending into monthly expenses and weekly expenses. For the weekly expenses, draw the money in cash and ration it for each item. For example: R2 000 total, R500 for petrol, R1 200 for groceries, R300 for dinner etc. Do this only on the day when you normally go shopping. You do not want to sit with a pile of cash burning a hole in your pocket. If we’re not careful, we’ll find something else to spend it on and companies will try to take it from us.

The One Rand Man that was sponsored by Sanlam was a fantastic example of this. The participant had lost touch with his financial affairs because of constantly using cards and automatic debit orders going off his account. In a drastic turn of events he was paid his entire salary in one rand coins and had to ration them to get through the month. It was only then, with the physical money in front of him that he truly realised and appreciated how much he had been spending in various areas of his life. He did not have credit cards to lean back on. He had to make it through the month with his stash of one rand coins. Whilst I wouldn’t go as far as to break up all my monthly spending into one rand coins, I think there is value in physically quantifying what you are going to spend and rationing it.

If the physical cash route is not for you then there are many apps that will help you to track your spending. A tool such as will allow you to take a step back and see where you are spending your money. You can link many of your bank accounts, investments and credit accounts to this app to give yourself a bird’s eye view of your financial affairs at the click of a button.

With the world looking to rush us into decisions and trying to force us to act emotionally and impulsively, the best solution may to be slow things down. If it is truly not a life or death decision, sleep on it before making it. Give yourself a few days to consider something before acting on it. By taking things slowly, in a fast-paced world, you can take some of your power back from those who are trying to steal it.

Trying to take a different perspective on a financial decision may be a way of short circuiting impulsivity, emotion and bias. There are two good ways of doing this. The first is to pretend you are giving advice to a friend. What would you tell them to do if they were faced with the same set of circumstances you are now facing? Say it out loud. You would be surprised how much what you are about to do and what you would tell your friend to do will differ. Be true to yourself and follow the advice you would give to your friend. The second way to do this is to seek out the advice of an independent neutral party, ideally someone who can give you their differing perspective. At the very least it will lead you to think more deeply about the decision you are about to make.

Avoiding decision fatigue is the best way to go. Deciding on an empty stomach or when you are tired can lead to disaster. Monitoring yourself before making decisions could lead to much better decisions, that are made for the right reasons not just because you are hungry or tired.

Remembering a list of new things to consider can be a burden. Perhaps a better way to do this is to create a decision matrix that asks you good questions in deciding. Some examples of these questions could be:

1.Is this purchase something I need or is it something I want?
2.How important is it that I buy this right now? Is this a matter of life or death?
3.Do I really have the money for this?
4.Can this decision wait till tomorrow?
5.Are they trying to rush me into this?
6.How am I feeling right now? Am I tired? Am I Hungry?

As Kahneman proved through his Nobel Prize Winning studies: we human beings can be irrational, emotional and impulsive when it comes to our decision making. It is through understanding this and understanding that the business world is trying to use this to their, and not our, advantage, that we can take a step towards making better decisions in the future. In this fast world, we should never be afraid of driving in the slow lane: it may help prevent us getting into a financial car crash.

A quick summary of how to take your financial power back:

Use Physical cash whenever you can and ration it. Don’t keep it too long, however.

If the cash idea doesn’t work for you, an app like 22seven will help.

Sleep on it: Take your time, they are trying to rush you and play on your impulses, biases and emotions. Don’t let them.

Give someone else advice about it (get perspective)

Never make decisions when you are tired or hungry

Partner with a neutral, experienced third party (CERTIFIED FINANCIAL PLANNER®) to help you strip the impulse and emotion out of your decision making.

Ask yourself good questions when deciding:

1.Is this purchase something I need or is it something I want?
2.How important is it that I buy this right now? Is this a matter of life or death?
3.Do I really have the money for this?
4.Can this decision wait till tomorrow?
5.Are they trying to rush me into this?
6.How am I feeling right now? Am I tired? Am I Hungry?
We use cookies to improve your experience on our website. By continuing to browse, you agree to our use of cookies