You feel so desperate right now that you believe that only the lottery could save you. But even if you win it today, a year from now you may find yourself in the exact same spot that you are now, or even worst… However, you may not win it today and find yourself in a different place in a year.
Take a look at what you do when you get paid. How are your spending habits right after you just get paid compared to your spending habits the days before that?
They are different, aren’t they? And I’m not talking about paying services and the food that you need to live, you need that.
I’m talking about those things that you are buying that are not absolutely necessary. You buy too much at the start, and are incredibly conservative in the last days.
Do you think that you are going to act any differently if you win the lottery? It is not impossible, but chances are you will not. Only this time you won’t buy small things in the store after you get paid, you will buy overly expensive things instead! And then, you are done, because there is not a second lottery payment coming after that.
You are not alone, this is the normal behavior in people, and it has a name, the Hedonic Threadmill.
This is the big trap in our lives, and if you don’t understand it, you will NEVER have financial freedom, even if you do win the lottery. But if you understand it and learn to handle it, it doesn’t matter where you are right now, you will reach it.
What is the Hedonic Threadmill in a few words?
You have a certain level of “happiness” and anxiety in your life, and you, unconsciously, try to keep that level.
If you are living paycheck to paycheck, anxious about not having any spare money to do pretty much anything, that is the state that you are unconsciously trying to keep! Of course you want it to be different, of course you want to increase your level of income so you have the spare money. But when you get paid, you actually spend more than you need because you are trying to get back to the same level that you had before the paycheck.
You will want to buy everything. You will experience a very strong urge to possess something that, if it was really a necessity, you would have had it already. And this psychological phenomena does not change with your level of income. If your income doubles now, this urge is going to come and hit you hard.
What the studies have found so far
This “urge” that we experience when we get something good, comes from the same psychological effect that we experience when something goes wrong. When we lose something, it doesn’t matter how important that something is, it may even be both of your legs; psychologically we begin a transformation so we can live with our lose.
What studies have found is that people whose life suffered a massive loss, and people who won the lottery; after one year they are basically in the same level of happiness/anxiety that they had before that happened. And I think I don’t need to tell you all the horror stories surrounding lottery winners. There are endless of those stories that you can find online in a quick search.
You don’t know when a big sum of unexpected money will come into your life. But you can get prepared.
What do I do then?
About every guide and book that you read, and every piece of advice that you get, will say:
Increase your income, keep your same expenses.
Very easy to say, right? But it is actually very hard to accomplish. You are fighting something that you don’t even know that exists, your are being betrayed by your own psychology.
The next time that you get your paycheck and go to the store to buy something, you will feel the urge to buy something beyond what you need. But now, you can identify it, know where that urge it’s coming from, and you can ignore it. It is hard at the start, but eventually, this becomes a habit, and you get used to have spare money in your pocket, and this is the level that you will always try to go back to!
Don’t completely deprive yourself from everything, don’t do that, you do need to take care of yourself and live.
But keep in mind that desire is easy to manipulate, and that you live under a barrage of publicity made by marketers who specialize in creating desire in you. You are fighting a tank with a knife here, what you need is a bazooka, and this only comes from learning and creating good habits.