In order to live a healthy life, we should eat well, sleep well, and exercise, right? We all know this already, but do we do them?
Let’s have an exercise. Answer honestly if you do any of the following activities:
Since our younger days, we have already been suffering from this. Our parents scolded us why we did this and that, even if we already knew what the right thing to do was. Most of us were probably labeled bad boys or naughty girls for behaving this way. Even in adulthood, we continue to suffer from this knowledge-behavior gap. Do you know why?
The human wiring
The pre-frontal cortex is our rational brain. If I give you a math problem, you will use your pre-frontal cortex. On the other hand, the limbic system is where we process our emotions, feelings, motivations, and impulses. Guess which of these two drives behavior? It’s the limbic system! And when the two are in conflict, guess which one rules? It is the limbic system.
The same is true when it comes to our money management. We all know that we should save and invest as early as possible in order to have a financially healthy future. That’s very clear to our rational brain. But when we are in certain situations such as being tempted by a sale, feeling depressed, getting overexposed to social media posts, partnered with one click purchases, we’re in trouble. All these send powerful titillating sensations to our limbic system, consequently knocking out our pre-frontal cortex. And then we’re doomed!
The truth is, it’s not only the millennials and Gen Z who suffer from YOLO (You Only Live Once) and FOMO (Fear of Missing Out) syndromes. We’re all prone to them because of our human wiring. We want everything now! We tend to favor short-term gratification at the expense of long-term well-being. But instead of just YOLO, we should remember YAGO (You Also Grow Old)!
The above discussions show why it is not enough to just rely on financial literacy when improving our FQ (Financial Intelligence Quotient). Knowing is not the same as doing. In the FQ curriculum that we will offer here on Edukasyon, you will learn how to use principles of Behavioral Economics in order to put your financial journey in check. Behavioral Economics is simply the fusion of traditional Economics and Psychology. We will discuss FQ hacks that will make it easier for you to do the right thing.
For the meantime, you may wish to take the FQ Test to know where you stand right now. After you do, check where you did better. Is it the knowledge part or the behavior part? We look forward to having you join that journey so you can master both parts. Cheers to high FQ!