postponing<\/a> major life milestones \u2014 such as buying a home, starting a family, or changing careers \u2014 due to financial strain. Among younger Canadians aged 18 to 34, that number jumps to 33 per cent.<\/p>\nWhile Chapman says affordability is the top barrier, she also points to psychological factors, such as scarcity thinking and instant gratification, that can keep people stuck in limbo.<\/p>\n
She explains that the brain has difficulty distinguishing between an actual lack of resources and the belief that resources are scarce. This scarcity mindset can cause a \u201ccognitive tunnelling\u201d effect, where it becomes harder to stick to long-term goals because you\u2019re hyper-focused on what you lack. That, in turn, can lead to a \u201cbandwidth tax\u201d \u2014 reduced cognitive capacity that can show up as lethargy.<\/p>\n
\u201cWhen the goal feels unattainable and so far away, you\u2019re just more likely to act out on temptations, which takes you further from the goal,\u201d Chapman said. Instead of socking away money for a home, for example, people might book a trip now, or buy a car with high monthly payments.<\/p>\n
\u201cFinances are complex,\u201d said Thuy Lam, financial planner and money coach at Objective Financial Partners. And there\u2019s an emotional piece that runs deeper than the numbers, which can be difficult to untangle.<\/p>\n
But numbers can tell a strong story, she adds. Some people may feel so overwhelmed that their goals seem out of reach that they avoid looking at their finances altogether. However, when you face them, you can see what plans might be possible, or start setting a savings plan little by little to begin working towards them, Lam says.<\/p>\n
Chapman also says that high usage of smartphones and social media among younger generations contributes to instant gratification. Research shows that constant exposure can lead people to underuse their pre-frontal cortex, which is a part of the brain that helps with temptation control, she says.<\/p>\n
Story Continues <\/p>\n
\u201cThat\u2019s the part of the brain that helps us not only achieve long-term goals, but also set long-term goals,\u201d she said.<\/p>\n
One method Chapman teaches is \u201creplace rather than restrict.\u201d That means finding low-cost alternatives to satisfy the same emotional need. For instance, replacing an urge to book a vacation with meeting friends for coffee or planning a hike over the weekend.<\/p>\n
Chapman used this method to replace her own temptations with actions that wouldn\u2019t take away from putting money into her First Home Savings Account (FHSA). \u201cWe know that restriction leads to compulsion,\u201d she said.<\/p>\n
She also recommends setting up financial goals to work with the brain\u2019s reward system.<\/p>\n
\u201cOne way to do that would be to make sure you create mini goals and then celebrate them as you go,\u201d she said. \u201cThe first milestone would be to set up an FHSA \u2014 goal one. Now, what can you do to celebrate it?\u201d, she said. Ideally, that celebration doesn\u2019t include spending money.<\/p>\n
Chapman overcame her own savings hurdles by reflecting on her beliefs about money, finding examples of people who achieved homeownership, and researching different ways to get there.<\/p>\n
\u201cIt made it feel a little more closer and achievable to me, rather than staying stuck in reading articles that say millennials can\u2019t buy homes.\u201d<\/p>\n
For those feeling stalled by the financial realities of today\u2019s economy, Chapman stresses that a delay, or even tweaking goals, is not due to an inadequacy.<\/p>\n
\u201cUnderstand that many financial goals are hard to achieve, not because of a personal failing, but because of the environment in which we are trying to achieve these goals.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Chapman, author of the Trauma of Money, explains that the brain has difficulty distinguishing between an actual lack…\n","protected":false},"author":2,"featured_media":328545,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,395,118280,2499,118279,118278,118281,16,15],"class_list":{"0":"post-328544","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-getty-images","11":"tag-instant-gratification","12":"tag-personal-finance","13":"tag-roberto-machado","14":"tag-roberto-machado-noa","15":"tag-thuy-lam","16":"tag-uk","17":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114994576353819307","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/328544","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=328544"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/328544\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/328545"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=328544"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=328544"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=328544"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}