The phrase lizard may evoke a not so pleasant response from most people. But the lizard brain or the reptilian brain is actually the most “human” part of the brain which is responsible for our emotions. Also called the amygdala, it satisfies all of our primitive survival needs – including safety, hunger, pleasure, and what not! But most importantly, our lizard brain could be the reason behind our failed finance planning too! Our lizard brain is the root cause of our impulse behavior. Learning to control it is essential for making good decisions. Whereas we have another part of the brain, Frontal Lobes, which is a newer, rational, and more advanced brain system. This is where thinking, reasoning, decision-making, and planning happen.
So essentially, we could blame all our mistakes and bad behavior on this part of our brain, but what good will that do for you? Nothing! Hence, the ideal thing to do will be to ‘quieten the lizard brain’, as Seth Godin suggests.
Here are a few ways you can do exactly that!
1. Put yourself before the lizard
One way to play it safe is to take care of your needs first, and then cater to the lizard brain. This way, there isn’t a chance of you digging into your rent budget or savings and making impulse purchases!
Make it a habit to first put away the money you need for your necessities such as rent, transport, etc. Then put the money you need for your savings into a separate account. Alternatively, you could set up an automatic transfer to make things really easy. If you do invest, it will be ideal to keep aside money for that as well.
Now you are forced to spend what you have left in your account. Try your hand at budgeting or Kakeibo to make this process easier!
2. Don’t give the lizard brain a chance
You must’ve observed that when you make frequent trips to stores or malls, you tend to make more purchases on impulse. So try and stay away from them, unless you have a clear purpose for being there.
If you happen to be in a store, remind yourself that if you save up, instead of buying things on an impulse, you could actually buy something you REALLY want! Don’t give your lizard brain a chance to get to you!
3. Identify its weakness
Upon close observation, you will find out that we spend more either when we have cash on hand, or when we have the card. If you find yourself thinking twice while spending your cash, then only carry cash.
Leave your credit and debit cards at home when you head out. The idea is to stop our lizard brain from overpowering your rationale and logic!
4. Be wiser than the lizard brain
No, credit cards aren’t meant for you to buy things you can’t afford to buy using cash, contrary to popular opinion! While it does help you while making planned purchases, don’t use your credit card to buy things you wouldn’t buy with cash impulsively! It is a trick your lizard brain uses to convince you to make those impulse financial decisions!
Instead, be wiser, and use credit cards to make payments on your recurring monthly bills such as phone bills and Netflix account, and arrange for the automatic deduction of the amount from your income every month. This will give you the required points on your credit card without adding to your debt! Also, this forces you to shell out cash on your impulse buys, and this will make you think twice, unlike the lizard brain!
5. Find a weapon to keep the lizard brain at bay
A commitment device is a choice you make today that will restrict your future choices, for the good. This could help you prevent the lizard brain from gnawing at you. For example, you know how you keep a bottle of water beside your bed just in case you feel thirsty mid-sleep? You do this to avoid going all the way to your kitchen to fetch water and ruining your sleep!
Similarly, you could use commitment devices such as making weekly meal plans to avoid buying food from outside, making a list of the things you need to purchase before you head out to shop, or investing early on to save for your future, etc. Various such steps can be taken to avoid excessive spending!
In conclusion, though it may be a little hard to restrain and fight your lizard brain initially, over time it will definitely get easier. It’s a simple philosophy – just as you ironically shoo away a lizard with your lizard brain, shoo away those impulsive money decisions as well!