- A lot of times, when we save money
we mostly focus on
what we are missing out on right now.
We're thinking of it as denying ourselves.
- Saving money often feels like
we're just throwing our money away.
Why save for the future, when there's so much
we want to do right now?
- And so for a lot of us
thinking about retirement is stressful.
And to avoid that stress, we just don't think about it
and that prevents us from doing
the things that are in our long-term best interest.
What is more important?
Your happiness right at this instant?
Or your happiness an hour from now or a day from now
or ten years from now?
And one of the difficulties and challenges with that
is that there isn't a correct answer.
- If there isn't a correct answer
how do we figure out the choice that's right for us?
Is there anything in our brains that can give us a clue?
This is Alex Korb, author of The Upward Spiral
and he's going to tell you everything
that he's learned about the brain.
- Yeah, so
I’ll just explain to you very briefly everything
that I’ve learned in the last 20 years of studying the brain.
Uh, so
there are millions of, you know
different little regions of the brain
and science has sort of simplified that down to
you know, dozens that we can sort of wrap our heads around
but the ones that I think are the most interesting
and the most important have to do with
the thinking and the habit and reward circuits
and how those interact.
You can sort of think of these different brain regions
as like different types of friends.
Your prefrontal cortex, the thinking part of the brain,
is saying “Hey, let’s do it this way
because that’s gonna get us to where we’re trying to go.”
And then the habit circuit in the brain says
“Well, no, let’s do it this way because this is the way
we’ve always done it and that’s more comfortable.”
And the reward center of the brain says
“Oh, look there’s a cookie!’
The human brain just has certain tendencies.
Like, we’re always gonna pay more attention
to things that are immediate, right now.
- This is how the brain’s evolved over millions of years.
We have a bias for the short term.
10 bucks today is more tangible
than 100 bucks a year from now.
- In order to, sort of, be happy over time
you have to find the right balance of like
how much money should I spend now
to enjoy living my life versus how much should I save
to plan ahead so that I can enjoy it later?
And there are ways to, sort of,
influence the system one way or the other.
There’s a really cool study where
when they had people sign up for their retirement benefits
they included like a digitally aged picture of yourself
so that when you looked at it
it was a little bit more concrete of the idea of like, “Oh,
I am going to become that person
like that is me that I am saving for.”
Most of us have this abstract idea of retirement
so it doesn’t like feel real or tangible.
You can make these future visions of retirement
feel more concrete by imagining them in more detail.
- Imagine you’re not just putting money into an account,
you’re putting money toward that brownstone
or that vacation on the lake.
The more you can imagine it
the more motivated you’ll be to realize it.
- One of the keys to being sustainably happy
is really just understanding yourself better
so that you can make choices that
are best for you and your circumstances
and understanding your brain can be a big part of that.
- If we understand how our brains influence us
to make certain decisions
we can work to overcome these biases.
When it comes to retirement
the good news is we can start small.
- Saving $1 a day is infinitely better than saving $0 per day.
And so just take one little step in the next direction
and then, you know, a year from now
“Ah ok, I could up that to $200 a month
and then ok” and revisit it.
You don’t need to solve all of your problems at once.
Making a tiny decision
and then realizing it wasn’t quite right
and then making another tiny decision
to go in a different direction
and then making another tiny decision.
That’s, that’s what living your life is
as opposed to thinking about all these possibilities
that I have no control over and sitting there doing nothing.
It will feel uncomfortable, but you’re doing it because
that’s the only way to get where you’re trying to go.