The Moral Instinct and Your Money

I recently came across a fascinating article from the New York Times by Steven Pinker called The Moral Instinct. The basic idea behind the paper is that people tend to operate with a “moral instinct” – an inherent sense that some things are “right” and some things are “wrong” – and use that instinct to make quick judgment calls on whether something they observe is a good thing or a bad thing.

It’s pretty easy to think about this in your own life, particularly when you use obvious and glaring examples of it. If you see one person kill another person, virtually everyone will think of this as wrong almost immediately. If you see one person give some of the food they have to another person who is nearly starving, virtually everyone will think of this as right almost immediately.

the new moral agenda
Interesting poster courtesy of Frank Hebbert

What gets trickier is when you start moving into more grey areas. What you often find is that one person might find some specific thing morally right, while another person finds that exact same thing morally wrong. You often see this playing out in the politics, where many of the social (and even many of the fiscal and security-oriented) issues are being debated between one group that instinctively feels some action is acceptable, while another group feels that action is not acceptable.

Where does this moral instinct come from? You’ll find a lot of different answers to that question, but the rough consensus seems to be that, much like other elements that make up who we are, it’s a mix of nature and nurture. Some of our moral instinct comes from our nature and we were born with it, while the rest of it is learned through the experiences of our lives.

Throughout my life, I’ve learned that many moral instincts are pretty much set in stone. Killing someone else is wrong – I’m likely never going to shake that.

On the other hand, there are a lot of moral instincts that, if I work at them and study them and evaluate them, I’ll sometimes change how I feel about them. My gut reaction to someone smoking has changed over time from “completely normal and fine” (as I grew up in an environment with several smokers nearby) to a position that now involves a lot of environmental context. There are a lot of activities that people do alone or with another trusted person that I might have once instinctively felt as being “wrong” but now feel largely indifferent about.

The point of all of this is that we often handle situations based on an instinctual sense of right and wrong and while some aspects of that sense of right and wrong are set in stone, others are not. However, it can take a lot of study, reflection, and work to change those aspects.

(What is morality, by the way? I like Wikipedia’s definition: “Morality (from the Latin moralitas ‘manner, character, proper behavior’) is the differentiation of intentions, decisions, and actions between those that are good (or right) and those that are bad (or wrong).” Morality enters into almost every action we take.)

This leads me right into personal finance, of course. Personal finance comes down to a long line of personal decisions, and many of those personal decisions are made purely on instinct. Our immediate reaction to a situation is that one of the choices is the “right” choice and we follow up on that choice.

Most of the time, these choices are well into the grey area of morality. There are some issues that are black and white: for example, most of us would agree that stealing from others is wrong, although it would be a financial gain for us. Stealing isn’t really in the grey area.

However, put yourself in the grocery store and stick a package of premium bacon in your hand. Do you put it in the cart or back on the shelf?

Most of the time, we’ll make decisions like that without even consciously thinking. We’re guided by what we individually think is right and wrong, and often it’s based on very incomplete information. As we walk down a grocery aisle, for example, we breeze past hundreds of items that we instinctually know we don’t want to buy because they don’t suit our needs. It is the wrong choice to put a brand of bread in the cart if our family doesn’t like that brand at all, for example.

The problem is that if our judgments of what’s right and wrong are wired in such a way that we continually spend more than we earn, it’s going to be rather difficult to get ahead.

I speak completely from experience here. Several years ago, when I would shop for groceries, my only real concern about buying an item is whether it would be delicious or not. Price was almost never considered, nor was the relative healthiness of the item.

Not only was this the norm for me, it was also the norm for most of the people in my life. The norm was spending your money for instant gratification and letting the future take care of itself. That meant you didn’t worry about price and you didn’t particularly worry about healthiness, because future you would earn more money and hit the gym.

While the “nature” of the choice might have pointed me somewhat in one direction, the “nurture” element pushed me to make some terrible choices with my money. My instincts guided me perfectly down a path of quick gratification, but guided me down a horrible long-term path.

How did I change that instinct? It’s still an ongoing process, to be frank.

I started the process by being incredibly deliberate about most of my spending choices. Rather than operate on the instincts that I had come to see as morally broken, I stepped back and tried to evaluate every situation where I spent money at a level beyond instinct. I still do this, particularly in places where temptation is strong. I used the ten second rule and the thirty day rule. I stopped for a bit with every single purchase I put into my cart. I focused intensely on the long term for each purchase I made.

At a glance, thinking about the long-term consequence of which dish soap or beans to buy seems a bit ridiculous, but there’s a twofold purpose to it. First, it forced me to think about the purchases in a way I hadn’t considered before. Thinking about the five year consequences of my everyday purchases was not something I was used to doing and it forced me to reconsider my life in a new way.

Perhaps more importantly, though, it subtly rewired my sense of right and wrong when it came to purchases. With that focus came a different internal understanding of what I should value with each item I bought. Price became a much larger factor. Healthiness grew in importance, too. Tastiness, while still relevant, dropped in importance. The brand name of items became less important, while the raw functionality of the items grew.

Today, I largely operate (in terms of my day-to-day money) on a set of instincts substantially different than what I used several years ago.

This makes for some interesting conflicts with some of my friends and family, particularly ones I was in line with on these issues years ago. When I describe a choice I made today, I’m sometimes greeted with a look of confusion because I’m making my choices based on different instincts. Which is right and which is wrong? That’s up to each person to decide, but I’m operating on ones that feel right for me.

This change in social reactions was actually one of the hardest things about shifting my spending patterns. When a friend is making choices that your gut is telling you is wrong – or at least significantly different than your own – it can be stressful. It can put a damper on that relationship, because often we build friendships based on commonalities, not differences. It can push against the changes you’re making to yourself and it can sometimes result in friendships weakening over time. We tend to congregate with people who share our values, experiences, morals, and senses of right and wrong, and when those start to change, it can be hard.

This issue of resetting your moral instinct with regards to your money goes beyond just spending choices at the store. It goes into things like saving for retirement, saving for your children’s education, saving for a car or a house, what vacation you choose, whether or not you have life insurance or what type of health insurance you have, and on and on.

It goes far beyond money, too. You can reset your sense of right and wrong with how you use your time, how you manage your health, what your political beliefs are, and so on. It relates to every aspect of your life.

Changing these things is hard. Not only is it hard to change how you make decisions internally, there’s often a network of people and environments around you that are encouraging you to keep making decisions the way you always have.

It takes time and patience and learning (lots of learning) to overcome yourself and the people around you and make the changes you need to make. Take failures in stride and focus on your successes. Take each step slowly and focus on just executing that step correctly. Don’t worry if you find someone in your life questioning what you’re doing as long as you understand the changes you’re making.

Give it time. Eventually, the right choice will move from being the hard choice to being the easy choice to eventually being the instinctive choice.

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