Finance

How to Use the Power of Your Mind to Trick Yourself into Saving More Money

Published

on

The average U.S. household has more than $15,000 in credit card debt. This is a problem that can be solved with a bit of psychology and some simple tricks to get yourself to save more money. Contrary to popular belief, the human mind is not a complex machine that is impossible to understand. In fact, it works very much like any other muscle in the body – if you don’t use it, you will lose strength over time.

1. Post visual reminders of your financial goals in strategic spots

“One way to prime yourself to save more money is to post reminders of your financial goals in strategic places,” says Howell. “For example, you could put a picture of the new car you want to buy in your wallet or on your computer screen.”

2. Use mental contrasting

Mental contrasting is a technique where you imagine your future self achieving a goal, and then contrast that positive image with the negative reality of what will happen if you don’t achieve that goal,” says Howell. “For example, if you want to save money for a down payment on a house, you would first imagine yourself making the purchase and living in your dream home. Then, you would think about the negative reality of not having enough money for a down payment and being stuck in a rental property.

3. Make it automatic

Make it automatic: “One of the best ways to save money is to make it automatic – set up a direct deposit from your paycheck into your savings account,” says Howell. “This way, you never even see the money and it becomes a painless way to save.”

While these psychological tricks can help you save more money, Howell says that the most important thing is to get started. “The sooner you start saving, the better – even if it’s just a small amount,” he says. “Saving early on will give you a much better chance of reaching your financial goals.”

4. Find a cheaper phone plan

Many people are paying for way more data than they actually need. Downgrading your phone plan can be a painless way to save $20 or more per month.

5. Don’t purchase upgrades

When it comes to making a purchase, always ask yourself if you really need the upgrade. Most of the time, the answer will be no – and that’s when you know you’re falling victim to what psychologists call the “hedonic treadmill.” The hedonic treadmill is a never-ending pursuit of feeling good, or more accurately, avoiding feeling bad. We want to avoid feeling pain, so we purchase things that make us feel happy in the moment. But the happiness is only temporary – and then we’re back to where we started, looking for the next quick fix.

Add New Post

If you can learn to recognize when you’re falling into the hedonic treadmill trap, you can save yourself a lot of money – and stress. According to Howell, “recognizing when you’re on the hedonic treadmill is key to getting off of it. Once you see that your pursuit of happiness is actually making you feel worse in the long-run, it’s easier to change your behavior.”

6. Wait 24 hours to buy any unnecessary items

He recommends the 24-hour rule: “If you see something you want that’s not a need, sleep on it for 24 hours. If you still want it after that, then go ahead and buy it.”

This simple tip can help to curb impulsive spending and give you time to really think about whether or not you need (or even want) something. “You may find that after a day or so, you don’t care as much about the item or you may have even forgotten about it altogether,” Howell says.

If you’re trying to pay down debt, another helpful tip is to “change the script” in your head about money. “A lot of us have what I call a ‘money story’ that’s running in the background of our minds, and it’s usually negative,” Howell says. “For example, you might tell yourself, ‘I’ll never be able to get out of debt’ or ‘I’m not good with money.'”

If that sounds familiar, it’s time for a change. Howell recommends reframing your money story by repeating positive affirmations about your relationship with money. For example, you can tell yourself, “I am good with money” or “I am in control of my finances.”

“It may sound hokey, but research shows that repeating positive affirmations can actually help to change your beliefs about yourself,” Howell says. “And when you believe you can save money and get out of debt, you’re more likely to take the necessary steps to make it happen.”

So there you have it: simple tips that can help you save more money and get your finances on track. Just remember, it all starts with changing the way you think about money. After all, your mind is a powerful tool—use it to your advantage!