Hacking the Hedonic Treadmill: Don't let fear Stop You!
Before I moved out of my one bedroom serviced apartment and into my room in a shared villa, I nearly had a panic attack. My eyes were permanently widened, my heart galloped, my teeth ground. The boxes were stacking up, and I just knew that they would overflow in my new place, and this was after a solid month of getting rid of everything I could think of that I didn't absolutely, positively need. Suddenly, my plan that I'd spent the last several months coming up with and executing seemed like the worst idea I'd ever had.
Then, I went back to the villa with my boxes. For some reason, in my anxiety, I had remembered the room as about half the size it actually was. I even had pictures and videos, but my brain had shrunk the size dramatically over the reality. "Oh," I thought, "my stuff will fit no problem, there's even an extra dresser in here that will be mostly empty!" My stuff fit fine, and my panic evaporated.
Eventually, I realized I was just going through "Loss Aversion", which is just your brain's lovely way of making losses, or potential losses, seem twice as bad as commensurate gains would be. Noble Prize winning Economist Daniel Kahneman and his partner Amos Tversky outlined this process in 1979, and in terms of our evolution, it makes sense. It's usually better for us to maintain a status-quo than to suffer a devastating loss and maybe starve to death, so the people who were hardwired to avoid loss were more successful in passing down their genes.
This Loss Aversion can make changes in our lives incredibly scary, just as my own brain shrunk the size of the room I was moving in to until I was nearly incapacitated with anxiety. I had no control over it, my subconscious brain was simply trying to maintain the status-quo.
But changing to a room in a villa saved me around 3,000 AED ($800 USD) a month! It's also cut my commute by 2/3 and given me lots of room to do yoga in the larger space that I have. My neighbors are friendly and quiet, all is well. It took about a month to settle in and get used to it, but now, I'm quite content and it has become the new normal.
In Personal Finance, there is a popular idea called the "Hedonic Treadmill". The Hedonic Treadmill is our brain's way of adapting to ever increasing levels of spending as we get raises. Our Toyota isn't good enough, so we need a Mercedes. And a few weeks after we buy that Mercedes, we go from being excited about it, to it just being "our car." Our old iPhone is a bit too slow, we have to get the new one. When we shop, we get hits of dopamine, but like any addict, we need bigger hits as we continue our behaviors, because we get acclimated to the previous level and it doesn't provide the same "retail therapy" boost.
This is why people who climb the career ladder and get raises often don't save money or meet their financial goals, and why a huge amount of people, no matter their income, live paycheck-to-paycheck and can't pay an emergency $400 bill. There's always something new to buy, or upgrade.
But we don't have to let the Hedonic Treadmill make us into chumps. We can use it to supercharge our saving, if we just re-frame it in a more conscious manner. We can get used to almost anything. The human mind is remarkably adaptable, allowing most any situation to become "the new normal."
This is why, once I got over my initial panic of downsizing my apartment, I got used to it. I even got to appreciate all the benefits. It's not a sacrifice because it's just "normal." I hacked the Hedonic Treadmill.
It's not only with my living situation that I've experienced this. A few months ago I stopped eating animal products, much to the surprise of everyone who has ever known me. Before I did it, I never would have thought I'd be able to make that "sacrifice". Give up Buffalo Wings, Steak, and Cheese??? Never! My brain screamed that I'd be a miserable mess if I gave those things up, not much different from a neurotic bunny rabbit nibbling on raw carrots, one eye always trained on the sky, looking for the shadows of hawks.
Then the massive health benefits started rolling in. I lost 20 kilos, stopped snoring, my skin cleared up, every month a new benefit I hadn't expected. My new normal was awesome! Hacking the Hedonic Treadmill had again brought me a better life, and hopefully a lot more of it.
In order to successfully break through the barriers of Loss Aversion, a few characteristics need to be developed. First, you have to be a bit brave to try something out of your comfort zone. It helps if you think breaking out of your normal every-day life will help you reach a particular goal you care about. Try doing a 30 Day Challenge instead of as a permanent life change, as this can be less intimidating but still long enough to build a good habit.
The second thing you need is patience to allow your brain to adjust to the new situation. If you try something new and your brain screams and fights back and throws a tantrum, like mine did before I moved, you have to be a bit stubborn, keep your goal in mind, and press on. When I moved, I told my new landlord that I wanted to pay for the first 2 months, but then have an option to leave after that period was up, a probationary period. This made sure I'd stay long enough to get used to it and see if I could adapt, but not be locked in if it was awful.
Unless you take action, your life won't change. What areas could you make changes in that feel like sacrifices, but would further your larger goals? I bet you'd be surprised what you can get used to!
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