The Inertia In your Life, And how it can affect your finances.

So let’s imagine its 12 am on a weekday. You’ve got work tomorrow and your still awake on the couch, staring bleary-eyed at the TV. Why? You don’t really know why. Well, it’s Inertia. Inertia simply makes it easier for you to stay sitting there and keep watching rather than getting up and go to bed. So, you keep watching.

That’s the power of Inertia.

The word inertia comes from Physics. Inertia is the resistance of any physical object to any change in velocity. In the example – you are the physical object stationary on the couch, and getting up would mean changing your velocity. Inducing this change in velocity will require you to enact a force. And so, Inertia is there to resist this change.

An object at rest stays at rest and an object in motion stays in motion with the same speed and in the same direction unless acted upon by an unbalanced force.

Newton’s first law of motion – sometimes referred to as the law of inertia.

But I think there is also emotional inertia that may be resisting against you. It’s easier to just passively watch TV than to go to bed and be prepared for the upcoming workday that you may have been dreading. You might have a deadline coming up, or you might not want to have to deal with particular people. Along with the physical inertia, there is emotional inertia that may be keeping you there.

So why am I talking about inertia?

I’ve been more aware of how inertia runs my life. Inertia keeps my routine going. Get up, have breakfast, make lunch, go to work, go for a walk, make dinner, read or write, maybe watch youtube, go to bed. It’s simple and easy- I know what to do when and the routine just continues. It takes more effort for me to adjust my routine than to just keep doing the same. There is inertia in my routine.

That is not to say that I have a boring life and don’t do anything outside of my routine. It’s more to say that I start with the routine on autopilot and allow changes where needed. But the basis is there. And that basis helps you achieve more from your life. My morning routine helps me get things done fast- I don’t need to worry about choosing what to have for breakfast- what to wear, when to leave. It’s all been set. The weekend on the other hand- has not routine.

My finances also have certain inertia built into them. I have set them up in such a way that they are automatic. I have to say- this is one of the best money tricks I know. My wages come in- and they are automatically proportioned and funnelled to pay the mortgage, transferred to our expenses account, and sent to my investment platforms, where it gets automatically invested. And the rest is for me to spend. I don’t really get involved in this process, and it’s been the same for a couple of years. That is to say- it takes more effort for me to stop this system than to just let it keep going.

Inertia of the Status Quo

So you can see that there is an inertia in the status quo. It’s a psychological inertia that has a tendency to maintain the default option. You tend to automatically choose the default, rather than working through the costs and benefits of choosing an alternative. Much like how choosing a default Kiwisaveris is much easier than weighing the pros and cons of all the other Kiwisaver out there.

And for a while, the inertia of the status quo was working well for me. It was great. I was getting exercise every day, going to be on time. My weekends were free for me to do what I wanted. My finances were automated. Cooking my own meals and making lunches was saving me money. And I was reaching my financial goals.

But my routine was not immune to external forces. A sudden shock or disruption can overcome any type of inertia or routine. And when this happens, the shock will cause changes to take place. And those changes then take hold to become the new status quo with there own inertia.

Where did the Inertia go?

And that is where I find myself today. The disruptions have happened. Covid, Lock downs, Elections, changes at work. The combination of them have overcome the inertia in my routine. Heck, the lock downs complete destroyed my routine altogether. And now with the changes in my working hours from the 9 to 5 into shifts and weekend work, I’m at the point where I could let a new routine freeze in, or work to get back to my some version of my old routine.

The loss of my weekly routine has lead me to exercise less, bike to work less, buy takeaways more often, and I find myself in front of the TV and YouTube for much longer than I would like. I have had less motivation to read and write. But the one thing that remains is my automated finances. Right now I’m currently trying to bring some of my old routine back.

Inertia can work for you, or against you

You can use inertia in routines to your advantage. Once you start with a routine, and you have been doing it long enough, inertia will make it easier to continue rather than change. But how do you solidify a new routine? Well, just like how the events of 2020 have changed our routines, a shock or large disruption can allow changes to take place and then those new changes can freeze into place and become the new norm.

Say you wanted to start investing. A shock could be to ask yourself “how much expected return would I be earning if I had started investing already“. Working this out might shock you and get you to start investing. Similarly for spending, you could ask your self “how much money and I spending on whatever” and work out how much your spending.

And if you can’t shock yourself- you can always find someone else from the outside to do this as well. It’s kind of like going for a checkup and the doctor telling you that your blood pressure or cholesterol is high. Having a professional telling you this is a decent shock to your system which can help you change your routines. A similar thing can happen with a financial advisor.

There are other ways to get you to change your routines- there is the carrot method, where you reward yourself every time you do the thing you want to turn into a routine. And there is the stick method, where you punish yourself for not doing the thing you want to turn into a routine.

Re-evaluate your Inertia

Just as an exercise, I want you to think about different types of inertia in your life. And whether or not they are working for, or against you. I’ll list a bunch of things that have inertia related to them.

  • Brand Inertia: Once a business has gained you as a customer, they rely on brand inertia, or brand loyalty, to keep you coming back for more. It’s easier for you to choose the thing you already know rather than to go out and see what the competition is offering. Sticking to the same brand can be a good thing- or it can cause you to not see the competition’s offerings, which could be better.
  • Utility Company/Bank Inertia: similar to brand inertia, utility companies and banks, and even insurance companies rely on inertia. It takes more effort to switch your bank than it does to stick with them. They know this- and that is why they spend more resources trying to gaining new customer with fancy deals and bonus offers, rather than resources on providing services for existing customers. They know that once you are in you are unlikely to change. How often have you changed banks for a better deal?
  • Cognitive Inertia: This is the inertia of ideas. We can have long-held beliefs that may or may not be correct. Or we can be blinded by our beliefs and not look at alternative options. Sometimes, I think many Kiwis have cognitive inertia towards investing in houses, rather than investing in other assets such as shares. There is cognitive inertia that says investing in rental properties is a sure thing, and investing in stocks is super risky and a surefire way of losing money. It’s generally hard to be open to new ideas that go against our cognitive inertia.
  • Investment Inertia: There is certain inertia involved with investing. Once you have decided where to invest- you will most likely continue to invest in a similar way. It takes more effort to do the work in researching the benefits and costs of a different investment than to just stick with the one you are currently in. This might be a good thing in that it make you continue to invest, but there are also times where Inertia can have a negative effect. Inertia may cause you to continue with a bad investment for longer than you should, despite all information telling you otherwise.

Subscribe For the Latest Content!

Subscribe to Passive Income NZ — get ahead with the latest post emails directly to your inbox. As a bonus, I'll send you a FREE Personal Finance Resource Kit, so you can start your Journey to Finanical Freedom.

Use This Link to save 4 months on a Sharesight Annual Plan

Information presented on the Website is intended for informational and entertainment purposes only and is not meant to be taken as financial advice. Some of the links above are affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through. Please note that I only recommend products and services that I have personally used.


Leave a Comment