Paying taxes hurts more than it should because losing money feels worse than earning less, even when the outcome is identical. The fix: set aside your tax money immediately when you get paid, so it never feels like yours to lose.
Taxes are painful, and the reason is because of a psychology called loss aversion. Imagine you came here to the office and I saw you and said, "Hey, here's $100. Good to see you." Maybe a little awkward, but it would feel great to receive $100. Now imagine a second scenario where I see you and say, "Hey, good to see you. Here's $100. Oh, give me $40 back in taxes." Now it's painful because you just received $100, which was kind of awkward but great, and now I'm taking money back. This is really odd and Gosh, I had $100. Now I only have $60. Imagine the third scenario where I see you and say, hey, good to see you. Here's $60. Not taking anything away. You're getting $60. We know logically scenario 2 and scenario 3 are identical, but there was nothing taken away. With our taxes, it's when the money's taken from us that we feel the pain. So in your business, in your personal life, when money flows in and you're going to have a future tax responsibility, first allocate that money out to a separate account before you see it. And now when the government takes it, it's not as painful.
