Money Magazine Australia
The Curse Of Complacency Image Credit: Money Magazine Australia
The Curse Of Complacency Image Credit: Money Magazine Australia

The Curse Of Complacency

Financial seatbelts build resilience, protecting us when things go wrong

When I was young, living on a farm in central NSW, my family had a faded green Valiant station wagon. Each Sunday on the way home from church, my siblings and I would sit in the boot of the car with the back window wound down as dad tore through the country roads creating a dust storm in our wake. There were some seatbelts in the car but no one ever considered putting them on. We didn’t wear seatbelts because we drove all the time and had never had an accident, so it didn’t seem important. The fun and freedom in the moment were valued more than acknowledging or mitigating any risk. We were complacent about wearing seatbelts.

This scenario seems absurd now. Putting children in that type of danger is no longer acceptable. A low perceived likelihood of an accident and high complacency towards wearing seatbelts meant catastrophic consequences for people when accidents did happen (luckily, something my family avoided).

Savings and investments are our financial seatbelts. They protect us when unforeseen, bad things happen.

So why are most of us so complacent about planning for these things and creating financial security? It turns out our brains are terrible judges of likelihood and chance. This is linked to a mental bias we call status quo bias, which is assuming that the way things are now, or have been, is likely the way things will always be. History is littered with examples of how devastating this kind of thinking can be (thin

Continue Reading with Magzter GOLD Subscription

Log in if you're already a subscriber

Get unlimited access to thousands of curated premium articles and 5,000+ magazines

Try FREE for 7 days or

Download the Magzter App and
Try FREE for 30 days

More from Money Magazine Australia