ME: Money Brain Barriers
Tuesday 17 Oct 2017
We look at the brain barriers that behavioural science tells us can hold you back from making better use of your money, plus tips on how to retrain your mind to overcome the hurdles.
Think of tomorrow, live for today
As humans we experience “present bias” – the tendency to place more value on what’s happening now than in the future, and it’s a key reason why we can find it difficult to save. But there are ways to make it more compelling to tuck money away for tomorrow.
For a start, try visualising your future self. If you’re saving for a holiday, for instance, try pinning snaps of your dream destination to the fridge as a reminder of what you’re saving towards.
More isn’t always better
If you’ve ever walked out of a store empty-handed because the sheer selection of products was overwhelming, you’ve experienced “choice paralysis”.
When it comes to financial products like savings accounts, comparison sites can be helpful in overcoming choice paralysis, narrowing down the product range according to the criteria you select.
Spending isn’t what fitting in is all about. And since most of your friends are probably in a similar financial situation to your own, it’s likely they’ll be grateful if you lead the way by politely bowing out from a shout from time to time.
Simply being aware of how your emotions and instincts impact your approach to money management can be the key to helping you make better decisions.
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