3 psychological tricks to save money

1. Plan ahead

Wendy and her colleagues managed to find out an interesting fact: people tend to save much more if they plan it in advance, and not at the moment when the money is already in their hands.

After filing a tax return in the United States, citizens are refunded part of the paid duties, and usually this money is perceived as a pleasant bonus. Some spend it on spontaneous purchases, while others use it for savings.

In a study involving two groups, people were asked how much of the tax refunds they planned to defer. Notably, those who answered the question immediately after receiving the refund were going to save about 17%. But those who were asked even before filing the declaration (without being sure that there will be a refund at all), named numbers from 17 to 27%.

This change in behavior is explained by the belief in the future itself as a more successful and capable person. The trick is to use this when planning your savings by committing to yourself.

For example, if you set up the deduction of a certain percentage from each salary on the deposit, you can avoid the temptation to spend money when it is on the card.

2. Make good use of transition periods

In psychology, there is a "blank slate" effect, when motivation increases at the beginning of the year, semester, or before a birthday. This also works with savings, which is confirmed by another experiment by de la Rosa.

While promoting a rental site for seniors, her team posted two ads on social media targeting the same audience - 64-year-olds. The first banner had the text “You are getting old. Are you ready for retirement? Renting rooms will help."

On the second, they just replaced "You are getting old" with "You will soon be 65", but this gave much more transitions and registrations.

This is the very “blank slate” effect, in which a reminder of age became a call to action. Such turning points, when motivation is very high, can be conveniently used to make decisions about savings, preferably backing them up with commitments.

Just add a reminder to your calendar the day before your birthday and set a financial goal.

3. Control frequent petty expenses

Research confirms that what people regret most is the money they spend on snacks and dining out. Such small expenses add up to a tangible expense item and hinder saving. By taking control of them, you can radically change the situation.

Wendy shows this with her own example. Living in New York, she spent over $ 2,000 on ridesharing, which was more than renting an apartment. The girl promised to save herself, but she still gave the same amount until she changed her behavior.

She untied the credit card in the ridesharing app and added a debit card with a $ 300 per month limit. When the limit was over, it was necessary to go through the procedure of linking a new card, which stopped Wendy from spontaneous spending.

You can do the same with other frequently recurring expenses - setting an acceptable budget and making payment after exceeding it more difficult. Instead of calculating limits, it is more convenient to use a limit on the amount of spending. For example, Wendy only allowed herself to ride three times a week.

If you are interested in this topic, see the original TED talk video for more details.