When it comes to money, are you a spender or a saver?
Do you think that money is to be enjoyed and spent now, or do you tend to focus more on the future, putting money aside for a rainy day?
We might not be quite at one extreme or the other, but most of us do have a general pattern when it comes to how we handle our money. Quite a few studies have been carried out to look into the psychology behind this, to try and work out why some people get such a rush from spending money, while others love the security of stashing it away.
If you’re not quite sure what your approach to money is, the people over at PayPlan have come up with a quick little quiz to help you diagnose your spending habits, and to then offer some advice on changes you can make to save a bit more and make the most of your money.
I took the quiz, which only took a couple of minutes, and was pleased to find that I’m apparently pretty good with my money.
The advice for me was to keep planning for the future, and there are links to a couple of guides with useful information to help with that.
This idea of thinking ahead to the future is an interesting one when it comes to they psychology of spending/saving money.
It all comes down to delayed gratification. Which is our ability to wait a while, to get more of something that we want.
There is a famous experiment that was carried out in Stanford in the 60s that looked at this idea of delayed gratification.
They put a big tray of treats down in front of a group of nursery school children and told them they could pick one thing from the tray. Then they were told they could eat it now, but then they wouldn’t be able to have any more. Or they could wait a few minutes to eat what they’d chosen, and then they would be able to have another one.
So if they could delay their gratification for a few minutes, they would have twice as much of the treat they wanted.
Some of the children chose to eat their one treat straight away, while others waited to get extra.
What’s interesting is that the researchers followed the children as they grew up and found that those who could delay their gratification generally went on to achieve more success in life than those who chose instant gratification.
When you relate this to money, you can see that people who spend more frivolously are generally the type of people who can’t delay gratification.
They want what they want, and they want it now. Even if they could have more of it if they just waited a bit.
If this sounds familiar to you then you can try to build you muscles in delaying gratification by telling yourself you’ll wait just a bit before indulging in something. Then build up to agreeing to wait a week before making a big purchase.
Chances are at the end of the week that urge to buy it will be nowhere near as strong.
If you want to try spending less and saving more then these ideas are a great place to start:
- Always compare prices. Before you buy anything spend a bit of time looking around to make sure you get the best possible price. It’s worth doing this with all your household bills once a year too to make sure you’re on the best tariff for you and your needs.
- Get cashback. If you do a lot of your shopping online then sign up for a few cashback websites like Quidco. Then when you want to buy something, do it through their website and you’ll get a piece of your money back a month or two later.
- Start menu planning. For a lot of families the weekly food shop is where a lot of money gets spent. But if you take a bit of time before you go to work out a meal plan for the week you can save yourself a lot of money from impulse buys and top up shops.
- Treat yourself. If you find that you splash out on new things for yourself when you’re feeling a bit down or stressed, then find other, free ways to treat yourself instead. Have a bath. Curl up with a good book or a few episodes of your favourite tv show. Talk to a friend or go for a walk.
- Cheat on the big brands. Next time you go shopping, try buying the shop’s own-brand version of the things you normally buy. They’re generally a fair bit cheaper, and just as good. This goes for food, cleaning products, laundry products and even things like painkillers. If you can let go of the ‘need’ to have the name-brand products you can save a fair chunk of money.
Hopefully these tips have given you a few ideas of how you can start saving a bit more money.
And if you’re not sure what your relationship with money is really like then pop over and take that quiz to find out!
Disclaimer: this is a collaborative post