The Psychology of spending and saving money

Surely at least once in your life you’ve wondered why your relationship you have with your money is what it is, or at least the same question has crossed your mind about some other person.

saving and spending moneyIf you fall into the group of prominent savers, you probably feel pleasure and success every time the funds in your bank account grow and you feel resentment whenever you need to buy something, especially if the amount you need to spend is significant.

On the other hand, if you fall in the category of spenders, perhaps even a compulsive shopper, you probably have the view that life should be enjoyed and you do not put much thought in to what’s going to come tomorrow. Therefore you completely surrender to your shopping impulses.

Most people believe that the habits in dealing with money are inherited from those who raise us – our parents, but studies have shown that our habits are not based only on how we were taught to treat money while we were children.

In fact, reality demonstrates that there are savers and spender within the same family, not to mention the wider family. There are people who were born in poor families and then reached great wealth because of their relationship to money and wealthy heirs who literally threw away all the wealth that they have inherited from their family on meaningless things.

But now, another question arises.

If the way we were raised as children is not the crucial determination to our attitude towards money, what then is indeed crucial for our attitude towards them?

saving and spending moneyThe experts find in their studies that the biochemical events in our brain have the main role in creating our financial habits. They researched what is happening with our brain when we make financial decisions. They observed the human brain activity, especially that part of our brain called insula. This part of the brain is active when we experience something uncomfortable.

The more you stimulate the insula, the less chance that you will keep doing what you have been doing. When it’s about money, the stimulation of the insula may stop you from wasting your money.

saving moneyOn the other hand, saving money or making good deals, to the people who love to do this, can bring them a real satisfaction. Good deals make them feel like winners. They are really happy and proud when they can save some extra money in their pocket at the end of the day.

If they go in a restaurant and they order a meal that usually cost $15, but after the meal they need to pay only $10, that meal for them will be “the meal of the day”, because they saved $5.

The thought at the end of the day, that they saved some money, gives them an extra satisfaction.

Many studies have shown that the people with a more active insula are prone to saving and the opposite – the people with a less active insula are prone to spend more money.

saving and spending moneyThese two extreme situations, extreme saving and extreme spending money, speak that the people who easily spend a lot of money on everything will put themselves in financial problems and the people who are always trying to save some money will feel guilty and unhappy every time when they buy some more expensive things.

If you are aware and know in which group of people you belong,  you have a good opportunity to help yourself start making a balance between saving and spending  money.

To simply be aware of this, during the holiday season, is a really important thing with great advantages and it’s a great beginning to start changing your style of living.

If you are not sure in which group of people you belong, don’t miss our next post where we are going to share some of the most known characteristic of the people who are savers or spenders.

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