The ability to accumulate depends not on intelligence and willpower, but on external stimuli.
All people want to save, but not at all it turns out. A specialist in the study of the problems of behavior Wendy de La Rosa is engaged in the study of habits that can lead to financial well-being. In her TED talk, she shares secrets that will help achieve this.
1. Plan ahead
Wendy and her colleagues managed to find out an interesting fact: people tend to save much more if they plan it in advance, and not at the moment when the money is already in their hands.
After filing a tax return in the US citizens return part of the duties paid, and usually the money is perceived as a nice bonus. Some spend it on spontaneous purchases, others use it for savings.
In the study, which featured two groups, people learned what part of the returned taxes they plan to postpone. It is noteworthy that those who answered the question immediately after receiving the refund, were going to save about 17%. But those who were asked before filing the Declaration (without confidence that the return will be at all), called the numbers from 17 to 27%.
This change in behavior is due to the belief in the future as a more successful and capable person. The trick is to use this to plan your savings by committing to yourself.
For example, if you set up a Deposit of a certain percentage of each salary, you can avoid the temptation to spend money when they are on the card.
2. Use transition periods to your advantage
In psychology, there is the effect of” clean slate”, when at the beginning of the year, semester or before the birthday increases motivation. This also works with savings, which is confirmed by another experiment by de La Rosa.
Promoting the site for the elderly on the delivery of housing, her team posted on social networks two ads aimed at the same audience — 64-year-old users. On the first banner was the text ” You’re getting old. Ready for retirement? Renting rooms will help.”
The second is just replaced “You’re” with “You soon be 65”, but it gave a lot more transitions and registrations.
This is the effect of the “clean slate” in which the call to action was a reminder of age. Such turning points, when the motivation is very high, are convenient to use to make a decision about savings, preferably backed by their obligations.
Just add a reminder to your calendar the day before your birthday and set a financial goal.
3. Control frequent small expenses
Studies confirm that most people regret the money spent on snacks and dinners out. Such small expenses add up to a tangible item of expenditure and prevent saving. Taking them under control, you can radically change the situation.
Wendy shows it by example. Living in new York, she spent more than $ 2,000 on a ride-sharing, which was more than renting an apartment. The girl promised herself to save, but still gave the same amount until she changed her behavior.
She untied the credit card in the ride sharing app and added a debit card with a $ 300 limit for the month. When the limit was over, it was necessary to go through the procedure of binding a new card, which stopped Wendy from spontaneous spending.
You can do the same with other recurring costs — set a budget that is acceptable and make the payment more difficult after it is exceeded. Instead of calculating limits, it is more convenient to use a spending limit. For example, Wendy allowed herself to use the ride sharing only three times a week.
If you are interested in this topic, there are more details in the original video lectures at TED.