We always make our financial decisions based on logic don’t we? Of course we don’t, we are human after all, and where money and emotions are concerned 1 + 1 doesn’t necessarily = 2
Take us for example, we live on a lifestyle block of 10 acres (or as we say, no life and no style) so not only do we have a house to maintain but also paddocks which need fences repaired, water troughs, fertiliser, weed control and we grow a lot of grass!! So we can either use a really big lawnmower; or as we have chosen to do, buy some cattle and have environmentally friendly lawn mowers.
Does any of this make financial sense? Probably not. The number of cattle we ‘grow’ over the 12 – 18 months we keep them, do increase in value as they grow in size. We get a nice cheque when we send them off to the sale yards and we use the proceeds to buy the next lot of ‘babies’ and get some of the maintenance done.
So why are we doing it? We all justify and rationalise our choices and decisions we make around money, as well as every other area of our lives with statements like this: ‘Living in the country is better than city, open spaces, fresh air’ Or, ‘Well the cattle don’t really cost us anything, they pay for themselves when we sell them’ .
Our logical brain knows that living on a lifestyle block costs us more in outgoings than say an apartment in the city, but our emotional brain has kicked in and given us lots of reasons for living in the country that have nothing to do with money and right now the emotion is winning.
No doubt there will be a point in time where our lifestyle block doesn’t suit us anymore and we will rationalise and justify ourselves into selling up and moving to that apartment.
So think about some of your own financial decisions are you following your logical brain or are your emotions winning as well?