Train Your Brain To Save Money
This is it. This is your year. Your year to become the boss of your dosh.
Forget the years previous, where saving may have been at the bottom of your priority list and instead put all your focus into this year. And make it the year of the big bucks, the decent dollar bills and the savin’ haven. Call it what you want (because we’ve run out of ideas).
A study by neuroscientists at Cornell University found that we can blame our brain for being terrible at saving money. The study suggests that “saving is less valuable to our brains, which devote less attentional resources to it… It’s more than a financial problem of making ends meet. Our brains find saving more difficult to attend to… It’s practicing attention and intention to save, to strengthen the value of it for your brain. It’s not the amount of dollars that matters.” It seems practice makes the pockets fuller.
And thanks to a few ingenious science-backed ideas laced throughout this article, you’ll be equipped with the best money saving tips on the interweb. Ready to save for your one-way ticket to Savin’ Ville?
Money Not Spent Is Money Earned
First, let’s take a look at the brain’s response to money and why it wants more, more, more.
A study by Mathias Pessiglione et al., looked at how the brain and body react to monetary rewards. They found that there may be unconscious motivation in humans when it comes to money. And here’s how and why:
“We imaged motivational processes, implemented in a paradigm that varied the amount and reportability of monetary rewards for which subjects exerted physical effort.”
Interestingly, without knowing, the participants used more force for higher amounts of money. “Such a motivational effect is underpinned by engagement of a specific basal forebrain region.” A region at the front and bottom of the brain. Their findings reveal “this region as a key node in brain circuitry that enables expected rewards to energize behavior, without the need for the subjects’ awareness.” Whether we like it or not, we are driven subconsciously by money and the rewarding feeling we get from spending it.
It’s no wonder that only 40% of U.S. adults “feel able to pay an unexpected expense of $1,000 or more” with more than a 1⁄3 that would borrow the money to pay the expense off. Our brain loves the feeling of spending, so it’s no wonder we spend and don’t save.
How on earth can you resist this built-in brain reaction? Well, it takes effort and dedication to train your brain to respond differently to money. And it’s worth it once you know how.
By appreciating the money you have and understanding how different your life would be without it, you will become more aware of its value. By understanding the benefits money can have can make you realise it’s cushioning prowess. Money can often lower stress levels and increase psychological comfort and therefore have a positive impact on your life.
Try living on a tiny budget for a week and see how it impacts your stress levels. A budget of £5 a day on food and essentials may shock you into appreciating your current financial situation. Science has proven that being grateful and appreciative can impact positively on the brain too.
A 2003 study by Robert A. Emmons and Michael E. McCullough from the University of California and Davis University of Miami, found that participants who wrote a list each week of things they were grateful for, displayed a positive increase in their well-being. Those who wrote a list of negative or neutral things didn’t display the same positive effects. The scientists stated that “a conscious focus on blessings may have emotional and interpersonal benefits.” Being grateful for the money you have can positively affect your well-being and may encourage your saving habits in the short and long-term.
Become Cash Only
Cash is officially queen/king. By paying with cash you can help track your spending with an eager eye. Having something physical like notes in your hands, makes the buying process more real and can encourage you to think twice about spending the big bucks.
Neuroscientists like Somers explain that paying with credit cards “isn’t even perceived by our brain as spending.” Certain areas of the brain are linked to pleasures you feel when you spend wonga.
Some studies have shown that when someone’s brain is scanned visualising using a credit card, the pleasure area lights up more than someone who is buying the same item with cash. Why? Having to fork out actual cash makes the brain pause to give these purchases a second thought. And it’s that brief pause that can decrease the brain’s pleasure response leading to less impulse purchases.
Another handy tip is when you go to purchase something on your favourite website and your card details have been saved, requiring you only to click and buy, try removing these details. Make the process longer and more thought-provoking by having to manually type the details in instead. This should help your brain to think more about impromptu purchases.
Over the next few weeks, actively watch your spending habits, as if you were a narrator of your own life:
“Tony is now spending £35 on a quirky 5 foot lava lamp he has no need for or space for at home.”
“Tony is now spending £3.50 on a bar of overpriced chocolate because he’s feeling low.”
“Tony is on his Mac and spending £66 on a bird feeder for the garden he doesn’t yet have.”
By becoming conscious of how, when and why you spend, you’ll learn copious amounts about how and why you splosh the dosh. Being mindful and aware is the key to nailing your saving.
Monitor and note the following:
- What impulses-to-buy do you have?
- What mood are you in when you spend?
- Do you ever spend when you’re stressed?
- How long does the happy feeling last after spending?
- How useful are the things you buy?
There’s a 30 day rule whereby you wait 30 days after wanting to buy something, to see if you still want the item after the 30 days are up. 30 days can be too long sometimes and seems daunting to a newbie saver. Instead tweak the 30 day rule to 7 days at first and then 14 days.
If you find a beautiful piece of jewellery, a pair of well-made leather boots or a glass vase in the shape of Elton John, give it 7 to 14 days to decide whether or not to make Elton yours or not. By doing this, you’ll be training your brain to tackle and make decisions, big or small, tactically, decisively and calmly. As a result, you’ll end up with less stuff in the attic and instead have more cash in the kitty. What do you do with the money you would have spent? Pop it into your savings account instead.
Save, Save, Save
Even though saving is deemed to be less valuable to our brains than other things, like making ends meet, we still have the power to train our brains and override our natural instincts in order to control our spending habits. Like with all types of training, to be the best at it you have to work hard and keep on training to reap the rewards.
By dipping in and out of these 4 saving tips, you’ll begin to tap into the world of saving and discover how to control, become aware of and start to appreciate the money you have.
Here’s to an enRICHed 2020!
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