That is the hypothesis I can reach from a fascinating study published in the Harvard Business Review, “Anticipating Pain is Worse Than Feeling It“¹. The conclusion of the study (which you have to pay to read, my apologies) is that the instinct to “Get it Over With” overrides our ability to wait patiently for something (specifically in the case of physical pain).
Photo from Marathon Man Courtesy Paramount Pictures
As the study is about physical pain and how we deal with it, the example (I am interested in) put forward in the piece was:
“… People would rather get a level 6 shock now instead of waiting five minutes for a level 4 shock…”
The article did not profess that these findings could be transferred from physical pain to mental stress, but given I am a simple country financial blogger, let’s make that leap, specifically in the area of mental anguish that carrying long-term debt causes (i.e. all future statements here are conjecture on my part).
If we had a feeling of dread about Debt and what it would do to us financially in the future, one point of view would suggest that if we did, we’d want to “Get it Over With” (i.e. get rid of Debt early, or pay it off) to lower anxiety later on, but that is painfully obvious that this is not the case with Debt, since we keep seeing debt loads build and build. The opposite seems to be true (i.e., we want to take long-term pain over short-term pain).
The other point I suggest is that the purveyors of Debt (i.e. banks, credit cards, etc.,) may be doing too good a job mitigating the Dread that Debt should bring you by masking your future problems or by making it seem simple to pay off each debt (without thinking about the big picture of debt), and thus you don’t believe there is a bad thing in the future, so this model doesn’t apply to debt. If this is the case, they are excellently mitigating and masking that long-term pain.
Why doesn’t Debt cause us Dread? It should.
My list of debt commentary articles is quite long, so let’s stick with the basics.
- Three Solid Ideas For Your HeLOC is a misdirection title. With interest rates going up, home equity lines of credit are becoming heavier anchors on your financial life.
- Pay Day Loans? Absolutely, positively NO! Go talk to a licensed insolvency professional before you do this.
- Surreal Paragraphs Found in Credit Card Bills, if you carry balances on your credit cards, you are in trouble. Look at their estimate for how long it will take to pay off the debt on minimum payments.
- A Mortgage Changes You, which is very accurate. When you get a mortgage, your life changes, and it will be a major element of your financial decision-making process.
- Make More by Reducing Debt with some elementary (maybe naive) arithmetic.
- Straight Talk on Your Money is not just a good book (and podcast). It explains how debt can get out of control quickly.
- Debt-shaming: Debt is Bad, but You Aren’t having a poke at the “influencers” who say my commentaries about Debt being BAD is debt shaming.
- My coup de grace There is No Such Thing as good debt. Debt is a tool, like a chainsaw, and must be respected.
I dread debt, but I also dread retirement as I have so little put away. at 52, I should have at least 250k put away to grow into what I need to retire on. That is NOT happening…
I think it’s because most people have a hard time imagining their future selves. Some studies show that given even a vivid picture of what they’ll be like in 40 years, people see it as a different person. Why should they care about a total stranger? It’s almost impossible for a 20-something to imagine themself as a senior citizen.
I dread debt, but I also dread retirement as I have so little put away. at 52, I should have at least 250k put away to grow into what I need to retire on. That is NOT happening…