In a good mood and relaxed while shopping
One bad habit that consistently drains your wallet like no other is impulsive shopping. You feel frustrated about something, maybe things are just sluggish at work or you are struggling with problems at home, and the digital shopping cart is already filled with purchases that in far too many cases are not used at all. As Prof. Dr. Mira Fauth-Bhler, neuroscientist and professor of business psychology and neuroeconomics, explained to BILD that such impulse purchases occur in particular when one is in a bad mood or stressed. “The control system in the brain that we use to achieve long-term goals, plan our finances, delay rewards, and resist impulses is overridden. Instead, the reward system takes over and demands that instant gratification that’s supposed to make us feel better,” she said .
According to Fauth-Bhler, another decisive factor in irrational, impulsive buying behavior is time pressure. According to the neuroscientist, the lack of time to consider and weigh possible alternatives and consequences means that the reward system, which is designed for short-term gratification, dominates the decision-making process. This also means that the bad behavior learned in this way is more likely to be repeated, which creates negative habits. The scientist advises impulsive shoppers to become aware of these patterns and identify the triggers so that they can then better avoid them.
invest money properly
Another way to save money more effectively is to manage your savings account properly. Sebastian Ebert, Professor of Microeconomics at the Frankfurt School of Finance & Management, explains to the Frankfurter Rundschau that it takes people active effort to make a savings decision every time. Ebert compares regularly transferring a small amount to doing sport: Although you are aware that you are doing something good for yourself, you do it less often than it would actually be possible.
The scientist therefore recommends setting up a standing order, as this eliminates the need to carry out the painful act of transferring money manually every time. A standing order or a savings plan has the advantage of always being prepared for the future. “People attach greater importance to their well-being in the present than in the future,” says Ebert. In behavioral economics, this phenomenon is referred to as “present bias” according to the Frankfurter Rundschau.
In addition, the economist also advises not only to rely on a savings or call money account, where the meager interest rates do not even compensate for the inflation rate, but instead to invest money regularly in a fund. This also has the advantage that one is less tempted to immediately spend the money saved again, since the sale of equity funds is more difficult and time-consuming than simply withdrawing from the savings account. Apart from that, the money saved can multiply so much better: the probability of making more profit on the stock exchange than would be the case with a savings account with interest rates of less than one percent is very high, although it must of course be taken into account here that the risk of loss is also higher.
Be realistic about the goals
According to Prof. Fauth-Bhler, one reason why many fail with their savings plans is the setting of unrealistic goals. “Trying to control too many impulses at once increases the risk of failure – which leads to a possible bad purchase that you later regret,” explains the scientist. Instead, she advises savers to divide their goals into small stages and to ensure that the individual intermediate goals are as specific as possible. The advantage is that in this way you can develop and make a habit of a saving behavior that is based on the reward system and requires significantly less effort and energy because everything is automated. This would remove the pressure of active thought and money-saving decisions. According to the psychologist, automation works particularly well if you use digital tools designed for this purpose.
Thomas Weschle / Editor finanzen.net
Image sources: kaczor58 / Shutterstock.com