Updated: February 22, 2020
Cognitive dissonance is a term in psychology where an individual experiences discomfort because they hold contradictory beliefs, ideas or values at the same time.
It’s the guilt you feel when you eat junk food after you promised to yourself that you’ll start making healthy food choices. Or when you take personal calls at work even though you know it’s against company policy.
To reduce the dissonance, that is – to make you feel less guilty about the situation – you try to justify your behavior.
After eating that junk food, you’ll say that it’s just one time and you’ll run an extra 15 minutes next time at the gym to burn it off.
Or you’ll justify that it wasn’t your fault that your friend called you at work, and besides you’re a good employee and a few minutes of personal time will not affect the quality of your work.
Interestingly, cognitive dissonance happens often when it comes to money habits.
For example, most people believe that saving money is good. But ironically, not everyone has cash savings.
People would rationalize this by claiming that their salary is just too low and they’ll just start saving when they get a salary increase.
When it comes to investing, a lot of people will also say that it’s very important to invest. But you guessed it… not everyone invests.
How do people rationalize this behavior? Through these four silly reasons.
I don’t know how to invest.
I’m sure years ago, you did not know how to use a computer. But you learned it eventually in school, through self-study, or with the help of a friend.
It’s foolish to say that you don’t invest because you don’t know how to, when there are a lot of websites you can visit, books you can read, seminars you can attend and people whom you can learn from.
I don’t have time to learn and invest.
You are reading this article, so you actually have the time to learn. More harshly, if you have time to watch television, then you definitely have time, but you probably just don’t want to.
Additionally, did you know that investing in the stock market only takes a few minutes of your time? It’s just like paying your bills actually.
I don’t have money to invest.
A lot of investments today only requires P1,000 to start. The minimum investment in some mutual fund companies is just P5,000. That’s really not a lot of money given that you can afford to eat out, or watch a movie every so often.
The real problem here is your spending priority. Cut back on your unnecessary spending to create an investment fund.
I want to enjoy my money.
I agree that you should enjoy your money because you worked hard for it. But more importantly, it doesn’t have to be a choice and you can do both.
You only need to save and invest a portion of your income, then after your necessary expenses you can spend what’s left however way you want.
Moreover, realize that when you invest, you’ll eventually have more money in the future that will allow you to enjoy life better.
Keep this in mind… a little sacrifice on your spending today means having a lot more choices to enjoy your life tomorrow.