How to Trick Your Brain into Saving Money

3 min Read

September 1, 2023

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Financial discipline often sounds easier in theory than in practice. Saving money, especially in a world teeming with tempting buys and instant gratifications, can be challenging.

However, with a few clever psychological hacks, you can train your brain to prioritize saving without feeling like you’re making massive sacrifices.

The Envelope System

This old-school method involves dividing your cash for the month into categorized envelopes (e.g., groceries, entertainment, dining out). Once the envelope is empty, that’s it for the month. Physically seeing your cash dwindle can be a powerful deterrent from overspending.

Automate Savings

Set up an automatic transfer to your savings account each month. If it’s automatic, you won’t have the chance to think about it or spend it. Over time, you’ll adapt to living without that money, and your savings will grow without effort.

Visualize Goals

Whether it’s a dream vacation, a new car, or a down payment for a house, having a visual representation of your goals can motivate you to save. Consider setting a picture of your goal as your phone’s wallpaper or placing it on your fridge.

The 24-Hour Rule

When you come across an impulse buy, especially online, wait 24 hours before purchasing. This cooling-off period often diminishes the urgency, and you may find you can live without the item.

The ‘Fun Money’ Jar

Set aside a small amount of cash for treats and non-essential buys. When it’s gone, it’s gone. This approach lets you indulge occasionally without breaking the bank.

Round Up and Save

Many banking apps now offer a feature where they round up your purchases to the nearest dollar and deposit the difference into a savings account. It’s an almost imperceptible way of saving money, and it adds up over time.

Make Your Money Work for You

Reframe Savings

Instead of seeing saving as depriving yourself, think of it as “paying your future self.” This simple reframing can shift your perspective and make saving feel more rewarding.

Limit Exposure to Temptation

Unsubscribe from retail newsletters, avoid window shopping, and limit your visits to online stores. The less you’re exposed to sales and marketing tactics, the less tempted you’ll be to spend.

Celebrate Small Wins

Every time you hit a savings milestone, even if it’s small, celebrate it. It doesn’t mean splurging, but perhaps treating yourself to something you enjoy. This positive reinforcement can encourage continued saving behavior.

Cognitive Anchoring

When shopping, especially for bigger items, always start by looking at the most expensive option. This ‘anchors’ your brain to a high price point, making everything else seem more reasonable and increasing the chances you’ll opt for a more affordable option.

While our brains might be wired towards instant gratification, with a bit of creativity and some psychological nudges, you can cultivate a saving mindset. Over time, these habits will become second nature, leading you to a more secure financial future without feeling like you’re constantly scrimping and saving.

Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.

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