The Psychology behind Spending Money
It’s important to realise that money is not always math and numbers, we have to remind ourselves that it has do with our minds and how we think. When you can realise and understand your spending habits, it can become easier to control them and that is exactly what this article is about. These ideas may link to some of your lifestyle choices and how you spend your money, if they don’t, then they can be a tool to help avoid them in the future.
Researchers have shown that there is a correlation between people who are disorganised and their impulse to spend. This means that people who are more organized feel like they are in control, especially with certain aspects of their lives. What this means is that they’re a lot less likely to impulsively spend money on items when they go out shopping because they know exactly what they need and what is currently in their home. Consequently, disorganized people will always feel this incomplete familiarity with their things, causing them to spend money on things they don’t really need, or worse, spend money they don’t have. So the best thing you can do for yourself is have a lifestyle makeover, and start being more organised with your everyday life.
This next study may seem a bit out there but researchers found that more people spend notes that are dirty rather than those that are clean and crisp, like the one you get from the bank. It’s odd, but there is some truth behind us putting more value on a clean bill than one that is dirty , thus making us want to keep it rather than spend it. If you try to retain new notes in your wallet when you’re carrying cash, see if this theory works. It may seem silly but sometimes our behaviour is as well.
Having said, people are less likely to spend larger bills as well. When most people see five $20 notes we know it equals $100 but it seems easier to spend $20 over $100. However, the downside to this study is that when people did decide to spend the larger bill, they spent more. So what do you do? Money is clearly playing tricks on our minds so the best thing to do is try out different ways to save money. Whether it’s never having cash on you, leaving cash at home, or even having a jar, find a way that best suits you.
The last idea is to keep in mind when it comes to the pressure of spending money is beware of advertising . It seems that because we’re getting bombarded with advertising all the time now that we’re getting better at detecting it, well we aren’t. The popularity factor of products, the ads on television, and word of mouth is what makes the consumer world flourish, however, if you do your best to make your own decisions and really think about if you need something or not , you can beat these psychological spending habits.
Disclaimer: The above information is general in nature and not intended to be financial advice. You should consider seeking professional advice before following any suggestions in this blog/website.