10 Sep Mental bandwidth
Do you ever feel like you’ve got so much to think about… that you can’t think? In this post, we talk a bit about the concept of mental bandwidth, and how important it is when it comes to managing your finances.
What is mental bandwith and why should I care?
Maybe the best introduction to mental bandwidth is in a book written by Sendhil Mullainainathan and Eldar Shafir, called Scarcity.
The basic premise is that we all have a fixed amount of mental bandwidth. If something important comes up, that task takes up an unusual amount of bandwidth, thus causing other tasks to get less than normal bandwidth allocated to it. This means we are more likely to underperform on those other tasks until we complete the important task and return the bandwidth that was ‘borrowed’.
It’s a bit like that metaphor of ‘keeping plates spinning’. There’s only so much you can focus on before other things start to fall by the wayside, and that’s as true for managing your money as it is for your work, or even making a sunday roast (one day we won’t over-boil the broccoli… one day).
If you’re using precious brain power on worrying about money, then that’s taking energy that can’t be used in more productive ways… like getting in control of your finances and feeling better.
What are people doing about it?
Sadly, not as much as we’d like to see. There’s plenty of new apps and tools to help you keep track of your budgets or hunt for better deals, but we think the simple act of giving people their mental bandwidth back is being overlooked. Having access to all of the tools in the world is great, but if your brain is too frazzled from money stress to use them, are they really helpful?
We think a big reason that people are so stressed about money is that it’s easy to feel overwhelmed. You’ve probably got dozens of things that all need paying for at different times of the month. Things to renew and things to cancel too, probably. If you’re borrowing money on a credit card or an overdraft, you’ve got to calculate how much you owe, how much you can afford to repay, how much it’s going to cost you… Just thinking about all of that is enough to stress you out.
You’ll see us talking a lot about stress and financial stability. They go hand in hand. If you’re in a financial stable place, you’re less likely to stress about your money (or lack of it). Reaching financial stability can be pretty hard work, and at Creditspring we know the more mental bandwidth you have available to use in your financial battles, the more likely you are to win them.
If we really want to fight financial exclusion, we have to start taking into account behavioural aspects. Even if we couldn’t change anything else, if we could start freeing up mental bandwidth for people struggling to make ends meet, we bet we’d start seeing a natural increase in productivity, resulting in overall increased levels of happiness, income and living standards.
So how are we going to help in the battle for mental bandwidth? That bit’s simple: we’re going to start by taking the stress out of borrowing. By building a brand way to borrow, that’s affordable, easy to use and without any hidden charges, we can free up people’s minds just a little bit more to focus on the important things in life.
And really, isn’t that what everybody wants?