When it comes to money, we often find ourselves acting against our best interests. Despite our intentions to save or invest, our behavior sometimes sabotages our goals. Take, for example, investing in a unit trust. On the surface, it seems like a straightforward and wise financial move. But because withdrawing funds is so easy, it’s incredibly tempting to dip into those savings prematurely. The result? Many people struggle to build a substantial balance over time. Contrast that with a pension scheme like the National Social Security Fund (NSSF). Here, your savings are locked away until retirement. You simply can’t access them. And that one simple restriction often results in a much higher savings balance. Why? Because the barrier to accessing the funds is high. That’s the power of a friction layer.
A friction layer is any barrier, rule, or protocol you intentionally put in place to protect yourself from making poor financial decisions. It’s a way of “outsmarting” your future self, especially in situations where emotions or convenience might lead you astray. In the world of personal finance, one key principle is that money needs time to grow. Regular withdrawals interrupt the magic of compounding, which thrives on consistency and time. Friction layers help guard against this by creating hurdles between you and impulsive actions.
There are several practical friction layers you can build into your saving and investment strategies. Withdrawal locks allow you to set time-based restrictions on access to funds. Early withdrawal penalties can serve as a strong deterrent. Joint accounts with a spouse or trusted partner add a decision-making layer, requiring mutual agreement before a withdrawal. Legal requirements, such as spousal consent before mortgaging marital property, serve as built-in safeguards. Each of these mechanisms introduces just enough friction to force you to think twice—and that’s often all it takes to avoid a mistake.
In business, friction layers take the form of financial controls. These include segregation of duties, where no single person can initiate, authorize, and execute a financial transaction alone. Governance structures like budget approvals, monthly reporting, and audits provide oversight. Multi-level approvals before major financial commitments ensure thorough review. While these practices might slow down decisions, they drastically reduce the risk of costly errors and mismanagement.
Perhaps the most overlooked friction layer is simply seeking advice. Consulting a professional—whether it’s a financial planner, accountant, or lawyer—before making large financial decisions can save you from massive regrets later. Before starting a business, taking out a large loan, investing in a new opportunity, or even buying property, a quick conversation with the right expert can help you weigh your options wisely.
Friction layers are not about denying yourself financial freedom—they’re about creating thoughtful barriers that protect your long-term interests. Whether it’s a withdrawal lock, a trusted advisor, or a system of checks and balances, these protocols help you stay the course and make smarter decisions. So the next time you’re tempted to dip into your savings or jump into a risky venture, pause and ask yourself: Do I have the right friction layers in place? Because sometimes, the best way to move forward is to slow yourself down.
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