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Money

Red, White, and Broke…Why American Finances Are A Joke

Author: NeuroGym Team | June 30, 2016

Fireworks, sparklers, hotdogs, burgers, red white and blue decorations...

Celebrations are expensive.

Have you been hunting down coupons, and cost-saving tips? Looking for DIY solutions? Keeping it low-key?

Or, are you like most Americans: throw it all on a credit card! You'll deal with it later.

Whether you make a little, or a lot, debt is almost inevitable in today's society. 

But why?

The Founding Fathers were all about freedom and independence. If you ask around, you'll probably get a lot of agreement.

So why are most Americans enslaved by debt?

Do we just care more about "stuff?" 

Resisting the urge to splurge in today’s society is no easy feat.

There are two big things that make overspending a lot easier today:

  • Advertising everywhere, and
  • Credit.

Let’s say your watch broke, and you need a new one. Maybe you browse online a little. You find one you like, but it’s pretty pricey -- you can’t really afford it.

For the next week, the picture of that watch will follow you around.

Every site you go to, there it is on the side of your browser, gleaming at you through the screen….

A week passes, and you’ve seen the watch about 3 times every single day.

Finally, you can’t take it anymore.

Maybe it’s late at night, after a long day at work. Or you just got off your butt and exercised, so you want to reward yourself...

At some point, your willpower is low, and you can’t resist anymore -- you have to have it.

Marketers follow you around with their products, just waiting for this moment. The second you’re tired, or feeling down, and you just want a little treat.

And Those Credit Cards...

Spending just hurts less with a card.

You get the stuff you want now, and the bill arrives sometime in the distant future.

When we use a credit card, we put a barrier between ourselves and the money. It just doesn’t feel the same for our brains. No more sharp little mental jabs, like when you surrender real, cold hard cash.

Now, of course you know that the dollar amount is the same, swiping or paying cash. It’s your nonconsious brain that’s being fooled.

Don’t believe it?

Check out this experiment: Professor Drazen Pelec at MIT held an auction, and told half of the participants they could only pay with cash, and the other half they could only pay with a credit card. The half with credit cards bid 2x more than the half with cash.

Credit cards are like a loophole that lets us buy the things we want, before we’ve really earned them, and without feeling the full pain of losing money.

(Now, there are smart ways to use credit cards -- don’t get me wrong. They can be a great tool. Right now we’re talking about the neurological impact of the whole system.)

Back to that watch story:

You decided to buy it. You pull out your credit card, type in a series of meaningless numbers, and voila! Your watch will arrive in a few days.

You felt a little guilty for spending that much. But that’s hardly noticeable, compared to the huge dopamine surge you just got.

When you use a credit card, you still have to pay …. eventually.

But to the nonconscious brain?

You just got a shiny new watch! And you didn’t have to hand someone your hard-earned dollars for it!

It’s not that Americans are dumb...

It’s that businesses got really smart.

Marketers, credit card companies, banks, etc. understand the human brain. They know what will make someone buy, or have their product.

And when it comes to your inner battle of emotional spending? Well, the big businesses definitely have the upper hand.

We love buying stuff. When you go to your favorite store, and splurge a little on a new pair of shoes, your brain gets a rush of dopamine. Just buying the shoes gives you a little high!

And just like drugs, that buying “high” is highly addictive. In fact, it might be the most addicitve chemical ever.

Why? Because dopamine is a powerful neurotransmitter, that comes from the reward centers in our brains. Once we get some, we just want more.

And then, we’re tempted by credit cards …

“Apply now! 0% APR for the first 12 months!”

So, you’re telling me I can go to the mall, buy a new iPhone 6s Plus, bags full of high-end yoga apparel, and a Burberry dog sweater… without paying a dime for 12 months?

Yippee!! Our reward circuits start firing like fireworks…

It’s Not Just Americans...

Maybe you remember thinking: “I’ll never get into debt! I understand how spending on credit works, and I use my money wisely…”

If you proved yourself wrong, you’re not alone -- almost 40% of American households have credit card debt.

In reality, we “know better.”  We know we can’t buy things without paying for them, or get whatever we want without earning the money to pay for it.

But somehow, most Americans still live in nice houses, drive nice cars, and carry $600 smartphones -- even though they don’t make nearly enough to buy them.

That’s because If you can’t afford your dream lifestyle, it’s now possible to lease it.

How and why would you turn down the opportunity to have your dream car, for just $500/month?

Especially when everyone around you is doing just that…

It’s not just Americans. Even America as a country is in debt!

19 trillion dollars??

Yikes.

Here’s The Bottom Line:

 If you have a debt problem, it’s not your fault.

It’s not because you’re dumb, or you don’t understand money.

Resisting the rampant marketing, and myriad of credit card offers can be like swimming upstream, weighted down by a pair of jeans and 3 sweaters.

The trick is to stop relying on willpower, and train your nonconscious brain. We’ve already talked about why willpower’s not enough.

Instead, you need to retrain your nonconsious mind around money.

That’s where NeuroGym comes in.

We use scientifically proven tactics to rework neural pathways.

Right this very second, your neural pathways are the result of your past actions -- your brain wants to keep doing what you’ve been doing.

To do something different (like quit overspending), you need a new neural pathway.

It’s not your fault you fell into the debt trap….

But now, you’re aware of it.

That means going forward, it’s your responsibility to regain your financial independence.

Right now you have two options. You can keep your head under the sand, and keep doing what you’ve been doing… Or, you can take ownership of your future.

Debt sucks.

We get it.

The quicker you deal with it, the faster it will be a thing of your past. The more you prolong it, the more you pay.

As Jim Rohn says, "There are two types of pain you will go through in life, the pain of discipline and the pain of regret. Discipline weighs ounces while regret weighs tons."

By tons, we mean tons of dollars.

Interest is no joke.

Take a look at how much you've paid in interest this year.

You can either pay that again (and more) next year, OR

Join this mini course called "Repair and Recovery: How To Live a 100% Debt Free Life."

What if instead of paying interest, that same amount of money went towards your dream vacation this year?

 

 

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About The Author

NeuroGym Team

NeuroGym Team: NeuroGym’s Team of experts consists of neuroscientists, researchers, and staff who are enthusiasts in their fields. The team is committed to making a difference in the lives of others by sharing the latest scientific findings to help you change your life by understanding and using the mindset, skill set and action set to change your brain.

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