Sustainable money?

(I do love sticking the themes titles!)

Since we just recently kicked off 2011 and most of our resolutions have yet to crash and burn and completely fail in utter disappointment become adjusted over the course of the year, I thought this NYT article on budgeting could be useful. It references a new invention – a smart wallet with a device in its middle that is wired to your bank account via Bluetooth connection with your cell phone and makes it harder to open your wallet as you get closer to your spending limit. Let’s say that again: a device in your wallet will make it harder for you to open your wallet when you shouldn’t be doing so to begin with. Yes, because people obviously need to be stripped of even more responsibility for their selves!

I’m not set against the tool itself, but I am largely opposed to the fact that society seems to be making excuses for individual failures that people should just buck up and be able to handle themselves.

Even though the magic wallet is not yet available, here are some other pearls of wisdom to be gleaned from the rest of the article:

  1. Obvious but true. “Part of the reason so many people spend too much, or fail to stick to self-imposed budgets, is because parting with our money has become an abstraction in our increasingly cashless society.”
  2. True but why is this an excuse? Get over it. “As a species, humans are notoriously poor at following through with their plans. Sticking to a budget […] feels too much like dieting. And we often fail at both for the same reasons: too much focus on the restrictions, not enough on fun. So it’s not surprising when people end up bingeing later, more than making up for dollars not spent or calories not consumed.”
  3. Again, get over it and grow up, people. The battle, say money and psychology experts, is finding ways to close the gap between good intentions and human nature.
  4. Not wrong. I like this part. Since life has a way of derailing our best-laid plans, the article suggests using psychological strategies to contain yourself (such as creating different bank accounts for your different types of needs) and learning a few useful approaches (such as attacking a few big categories to cut costs).
  5. Shifting responsibility in moderation can be a good thing. “We need to exploit automaticity.” Instead of relying on yourself to do withdraw money, just arrange to have it removed for your retirement plan, your school loan payment, etc automatically.

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