Wikipedia defines inertia as the resistance of an object to a change in its state of motion, including changes to its speed and direction. For example, a snowball rolling down a hill has inertia – it builds up speed and momentum and becomes rather difficult to stop. Things that are still also have inertia. For example, a big snowball that has come to rest on a flat field has inertia because it is difficult to move.

What is interesting is that peoples’ thoughts and actions also seem to have a sense of inertia. There is evidence, for example, that people reject information that contradicts their views (we prefer information that confirms what we already think), tend to take the default option, are highly habitual, often giving little thought to what they are doing, and struggle to get started when making changes to their behaviour.

The problem is that this inertia can mean that we don’t always act in our best interests. To give some examples in relation to personal finances, there is evidence that we do not switch energy providers even when so doing might save us money, that we often renew our insurance policies without comparing the market, and that we struggle to get our finances in order despite good intentions.

The Institute of Inertia has been set up to investigate the reasons underlying inertia, particularly with respect to personal finances. We also hope to find ways to help people to overcome inertia and achieve their goals.

As a starting point, we have described some possible reasons for inertia. First, people may struggle to take action because they have their head in the clouds; that is, they have not really thought about what they want to achieve. Without goals, it is difficult to decide what to do. So a first step to overcoming inertia is to set some goals – would you like to save money on your energy bills?

Just knowing that you need to deal with your finances, however, might not be enough to overcome inertia. There is evidence that people have a tendency to bury their head in the sand and avoid thinking about things, especially if they mean that they have to face up to an awkward reality. For example, taking out insurance requires us to confront the possibility that something bad might happen. We call this tendency to avoid issues  ‘the ostrich problem’.

Even people who do have clear goals and are prepared to take action might struggle to overcome inertia. This might be because they are simply tempted to do something else instead. How many of us have sat down with the intention of comparing insurance products and found ourselves looking at Facebook instead? We call this tendency to get distracted, a situation where the heart rules the head.

These are just some initial ideas of the reasons underlying inertia. As I said, the Institute of Inertia will undertake research with members of the general public to identify instances of financial inertia, and to explore the reasons why inertia occurs. Our aim is to help people to get their head in the game and save time and money. It would be great to hear from you, so please do comment and get involved.