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Cognitive Dissonance – Why We Hate Change

Leon_Festinger_cognitive_dissonance

Why do we hate change?  Reason – Cognitive Dissonance

Change is a tough thing for us humans to take.  How often does someone’s job or life change and we get excited vs. we get stressed out?  How often do you have a core belief all the way from childhood are you willing to dismiss it for a new belief?  Don’t worry, you are not alone and we all have a hard time trying to rewire our brains to new ideas and beliefs.

In psychology, cognitive dissonance is the mental stress or discomfort experienced by an individual who holds two or more contradictory beliefs, ideas, or values at the same time, or is confronted by new information that conflicts with existing beliefs, ideas, or values. (reference)

Leon Festinger’s theory of cognitive dissonance focuses on how humans strive for internal consistency. An individual who experiences inconsistency (dissonance) tends to become psychologically uncomfortable, and is motivated to try to reduce this dissonance—as well as actively avoid situations and information likely to increase it. (reference)

See, the whole issue is more complex than just changing one’s beliefs, because we are told something is better.  We all have deeply ingrained beliefs that we hold onto.  These beliefs have been shaped by life-long teachings, experiences, and behaviors.  Changing some of our beliefs is much more difficult than we would think.

Let’s use car debt as an example.  Most of us have grown up with fairly nice cars new to 7 years old.  After a car hits 100,000 miles are starts getting old we begin to feel like we need a new car.  Maybe a few things start breaking (alternator, timing belt, brakes, starter, etc…) and we start to think to ourselves, we need to sell the car.  Families are rarely without at least one car loan of $200-$300/month or even more.

Why do we feel this way?  Do cars run past 7 years and with over 100,000 miles?  They absolutely run past 100,000 miles and once we get things fixed on the car they continue to work for many years again.  We have a belief that an older vehicle is not reliable and we will breakdown on some rainy day in the middle of the night (queue some scary movie theme here).

The truth is we almost all have cell phones (or TracFone if you are in the CageFree Tribe).  If you have insurance a tow truck is only about 45 minutes away in almost any location you could break down in.  Changing our beliefs about owning vehicles past 100,000 miles and for more than 5-7 years is very difficult.

Once you start going into politics, you can find 100s of examples where no matter what data is presented to someone they will never change their minds.  Why do you think politicians focus on the groups of undecided or independents so much during the general elections?  That is the only group who is open to other suggestions when it comes to politics.

cognitive dissonance yoda

Another great example is trailers as homes.  How many people view trailers as a negative when it comes to having one as a home?  Do you realize if you take care of a trailer, it can be a very nice home for many years?  My own grandfather had the same trailer for over 40 years.  It will not go up in value, but if you are looking for an inexpensive and most of the time very nice home they are actually quite nice.

No real estate or financial investor would tell you get a trailer, but let’s look at the math a moment.  If you buy a used 2-3 bedroom trailer in good condition, it could cost about $25,000.  You can either buy a piece of property to put that trailer on or you could rent a lot, which can cost ~$250-$350/month.  Total cost of home ownership over a 15 year period for the trailer owner is $79,000.  This is assuming the trailer owner could make the purchase with cash.

The average mortgage for a homeowner is ~1,000 per month (not including taxes or insurance).  I am leaving those numbers out of these calculations, because they vary a lot depending on where you live.  Most homeowners still need to put 10% down, which can almost be the cost of a trailer.  The 15 year expense with $20,000 down + mortgage for a homeowner is $200,000.

You can save approximately $121,000 over a 15 year period if you purchased a mobile home vs. a house.  In order for the house to be the “better” purchase it would need to appreciate by over $121,000 in a 15 year period.  If I extend the number out to 30 years, it just gets embarrassing.  This also does not count if you were able to invest that $121,000 over the 15 year period what you could have made additionally.

I am not saying to go out and buy a trailer although it can be a great choice for living debt free.  You can also buy foreclosures, short sales or wholesale homes, which with some work can appreciate to great investments (only if you purchase with cash).

cognitive dissonance star wars

Hopefully my Star Wars references are okay, but don’t let the dark side win.  Businesses and banks want us to continue to have cognitive dissonance when it comes to our purchase behavior.  They get very wealthy off our interest payments.  What happens when we are able to change our views from what almost everyone is telling us?  We begin to become financially free.

No politician or business can make you free.  You and your family have all the power to change your life.  Look for ways to be frugal and stop caring what other people think.  Once you are free you can make choices which make you happy instead of the choices which keep you afloat from all the payments each month.

Have a wonderful week!

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