Are you looking at your post-holiday bank balance with trepidation? It’s easy to judge yourself for being undisciplined with money, but modern life is expensive – and money, psychologists have long recognised, plays countless tricks on our minds. It gets tangled up with our emotions, so we spend in an effort to feel better, even though that usually doesn’t work. It’s abstract, so we struggle to keep track of it: for example, studies show people spend more when they use credit cards because they make money feel less real. Even if you stick to a budget most of the time, just one or two exceptions a month – for home repairs, birthday gifts and so on – can mess up everything. Fortunately, you can use what psychologists have learned to trick your mind in the opposite direction, so you’ll spend less and save more.
Take advantage of the ‘Hawthorne effect’.
In a classic psychology experiment, factory employees worked harder simply because they knew researchers were watching them. Likewise, make a note of every single expenditure (you could use a pocket notebook, or your phone) and you’ll almost certainly find yourself spending less.