When it comes to debt and saving, don’t be an ostrich

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Man with his head buried in the sand

At one time or another, most of us have been financial ‘ostriches.’ You know what I mean – when it comes to money, it can be oh-so-easy to ‘stick your head in the sand’ and ignore the reality around you. Maybe you have put off paying a bill so that you could treat yourself to a nice outfit, or perhaps you neglected to set up a new savings plan when you knew you should. It could be even more serious, like ignoring the need for savings, a pension plan, or other future needs.

If you read the above paragraph and thought ‘mmm, that sounds familiar,’ chances are that you’re an ostrich. Ostriches sense the danger around them, but these birds simply bury their heads beneath the dirt in order to escape. Sure, it’s a defence mechanism, but it’s a completely useless one. The danger – your debt or failure to plan for the future – is still creeping up all around you.

But the good news about being a financial ostrich? You don’t have to stay that way.

Why do some of us become Ostriches?

This “Ostrich Effect” happens when our rational, sensible mind realises that something is important, but is also frightening or unpleasant. Think about all the times you or someone you know has avoided exercise because it is strenuous, even when you know it is good for your mental and physical health. It will benefit you greatly in the long run, but you still neglect to do it, burying yourself in the sofa, and burying your head in the sand.

The term was coined to refer specifically to our tendency to avoid negative financial information. Ostriches ‘solve’ their financial problems by ignoring them for as long as they possibly can. Then, at the very last minute, they react in panic and agony when they realise they have no choice but to act.

We don’t actually help ourselves by ignoring our financial problems. The temporary relief of ‘doing nothing’ actually compounds our problems and just makes them much worse in the long run. These small problems become very big ones over time. As a result, ostriches end up with overdraft fees, monthly shortages, empty savings accounts, and no plan for retirement.

man in suit with his head int the sand

How can you stop acting like an Ostrich?

As promised above, you don’t have to spend your life sentenced to your ostrich ways. That said, you have to truly want to change – you must recognise that in an attempt to quell your discomfort, you are causing yourself unnecessary stress in the long term. Once you are ready to end this cycle of financial stress, you can. Here’s how.

Reward yourself for dealing with stressful tasks

If you are dreading your most stressful financial tasks, try something called temptation bundling. Reward yourself with something nice every time you do something unpleasant. For instance, while you work your way through a stack of bills, treat yourself to a slice of cake or a glass of wine. When you make an appointment with a financial planner, or do an hour or research on pension savings plans, buy yourself something little on your wish list. This helps to minimise the stress, and you might even start to associate your finances with positive feelings!

Get on the automation train

Automatic payments are more common than ever, and they can really help set an ostrich straight. Take a few minutes to set up an auto-payment or auto-savings, and it will happen like clockwork. Best of all – it is out of your hands.

Keep an eye on your credit rating

Ostriches have a bad habit of damaging their credit ratings. Unpaid bills, late payments, and scatterbrained mistakes can all damage your credit rating, and it can get worse over time if left unchecked. To make sure that you don’t lose track of your credit rating, check out services like CreditKarma or Clearscore. Best of all, you can watch it rise as you improve your finances!

You don’t have to remain an ostrich

You’re not relegated to a life of financial stress and panic – it’s never too late to change your ostrich ways. Following the tips above can help you to harness your power over your finances, and build a stronger, more positive relationship with money.

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