Exploring the three whys, behavioral psychology, and money iterations

Welcome to the Intentional Dollar weekly newsletter — great work taking this small step to move your money forward. I’m Logan, a Certified Financial Planner™, and I’m excited you’re here!

What’s inside?

• One tool to experiment with

• Two quotes from others

• Three questions to dig deeper

• Four lines of poetry for the point

_{One tool to experiment with:}

The Three Whys

How often do you dig beyond the surface level of your beliefs and actions?

Like weeds in a garden, long-held beliefs are firmly anchored in our minds through a deep root system. If you remove the weeds by pulling their surface level leaves off, you’ll temporarily accomplish your objective; however, with the roots still in place, the weeds will return.

To successfully remove the weeds you have to dig out the roots. Roots rest resiliently below the surface; it requires a different perspective to see them. By that very nature — you cannot see them without digging deeper. When we apply this framework to our belief system, it’s evident we need a shovel to dig out those mental roots — the three whys is that shovel.

So how does this work?

Think through your current money beliefs and actions:

• paying off student loans

• saving cash for a car

• a mortgage should be paid off early

• investing in a traditional IRA or 401(k) for retirement instead of Roth

If I asked you why you do those things, your first answer might look like this:

• “I need to pay off my student loan debt before getting a mortgage.”

• “Having auto debt is bad, so I need to have cash to buy a car.”

• “If you don’t, you’ll pay so much interest — and your house is a great investment!”

• “I need to build retirement savings, and I get to save on taxes now.”

Those are first why answers, and the dangerous, although common, scenario is that they are often the only answers.

Higher thinking comes from continuing down the why path:

• Why do you need to save on taxes now?

  • Why do you think your tax rate will be lower in the future?

    • Why are you only looking at tax rates and not additional features?

The three whys start to uproot and till the ground for new steps and beliefs. This tool functions as a friendly self-debate. It can be quite uncomfortable when someone externally, or publicly, challenges our beliefs.

So use this and investigate the rationale behind your good — and bad — money beliefs and actions. This is not to dissuade you from your current course, rather to let you investigate it deeper. Each question advances your perspective and provides a new landscape to survey.

While this is a great tool to get to a new vista, it won’t be enough to change your existing behavior. When you dig deep enough, keep a “What if?” question in the chamber. This is how you intentionally experiment. Check out the three questions on money iterations (below) to launch your initial tests.

_{Two quotes on behavioral psychology:}

Your psychology will drive the majority of your financial performance. Do you sell when prices go down because it’s difficult to stomach? Do you dismiss saving because you think your current contributions won’t move the needle? How you think, and how often you think about money, can create emotional loops, and cognitive dissonance, that ultimately lead to poor long-term decision making.

_{Three questions on money iterations:}

1. What if I increased my retirement contributions by 1% today?

2. What if I started an automatic $10/week contribution into a high yield savings account?

3. What if I listed out all of my subscriptions and kept the 80% I enjoy most, and eliminated the rest?

Which question stuck with you? Questions like these are spotlights for the mind. Reply to this email and let me know which one shined light on a previously dark cave.

_{Four lines of poetry for the point:}

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