3 minute read
MONEY: the trick to
from strhw 345yq3y
by loopedsaxe3
Money The psychology of saving
Saving is the cornerstone of good financial planning but it can be hard to stay on track. Genevieve Gannon explores some expert tips to help you stop spending and start saving.
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Tip 1: Remove the rush The terms ‘retail therapy’ and ‘buyer’s remorse’ are well known, but what you may not know is that these emotions are driven by the same brain chemicals at play in addiction. When we’re bargain hunting, our brain releases dopamine, which gives us a shopping high.
“It’s about slowing down and nding mechanisms to do that,” nancial planner and author Kate McCallum says. Rules to short-circuit this thrill, she says, can ensure your savings aren’t being frittered away.
“I got an email the other day from an activewear company. The designs were beautiful and they were on sale.” She felt herself being drawn to the buy button. “I picked a few things and I put them in the cart and then I logged out. By the next day I thought: you know what, I’ve got enough for now. “I felt a sense of relief, not disappointment at not buying something.”
Kate has a 30-day shopping rule. Whenever she sees something she likes, she makes a note of it in her phone and reassesses it after 30 days. Often she nds she no longer really wants the item.
“It’s about asking, is this the best use of that dollar?”
Research into shopping addiction tells us that the decision to buy is often made in a split second, and is driven by the desire to feel that shopping rush rather than rational thought.
“It’s ipping it from that autopilot into conscious thinking,” Kate says. “When we make conscious choices, they have more weight to them.”
Tip 2: Visualise your goals Saving for a new car? Pin a photo of it above your desk. Working towards a holiday in Queensland? Make the Great Barrier Reef your phone screen saver. Having a constant visual reminder of what you are trying to achieve is a useful way to help prevent you straying from your goal.
“One of the things I talk to clients about with that goal-setting exercise is to get a big poster and use post-it notes and represent it visually,” Kate says.
A lot of her clients use mood boards or visual cues to remind them what they’re working towards.
“The psychology says those visual stimuli are fantastic ways to keep you on track,” she says.
Tip 3: Shoot for the moon “One of the questions I love for personal planning is, ‘What are the boldest things we could do?’” Kate says. “It creates a really lovely pull into the future, something that’s fun and something to look forward to.” In her book, The Joy of Money , Kate talks about using these bold
ideas to clarify your priorities. “You can reshape a goal to still reach the heart of what you really want,” she writes, with co-author Julia Newbould. “For example, you might want to hike the Camino in Europe, but decide that you would be equally happy to hike the Three Capes in Tasmania. “Or, if you decide this big grand idea is something you really want, you can break it into smaller, achievable chunks to help you stay on track. “If you can hit a goal that has a big impact, that’s super-motivating,” Kate says.
The best thing about micro goals is that if you miss one, it’s less de ating than if you don’t achieve a big goal, and so it’s easier to recover from. “It’s much easier to get back on the wagon with baby steps,” Kate says. AWW The Joy of Money by Kate McCallum and Julia Newbould will be published by Bauer Books in April. RRP $29.99. GETTY IMAGES.
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