Savings is an art involving psychology. As strange as it may sound, our psychology of dealing with money dictates our spending patterns. While most of us know how to spend, very few are aware of the nuances of savings. If you find it difficult to save, these five psychological tricks will help you save a lot of money.
Make savings fun and challenging
We all love to do things that are fun and challenging. Today, there are various online tools that help you make savings fun as well as challenging. With the help of these tools, you can watch your money grow. Some of these apps even reward you with free cash when saving money, thus allowing you to be more responsible with your finances.
Also, there are various programmes that offer lucrative rewards for saving. Participating in such programmes make the entire exercise fun and challenging, thereby allowing you to save more.
Curb impulsive spending habits by putting a limit on your cards
In the digital era, plastic money in the form of debt and credit cards have gained much prominence. Coupled with online shopping, it’s very easy to splurge using your card. However, a limit on your card will deter you from making impulsive purchases.
Also, it’s a common practice to store card details online. This can be counter-productive as it’s easy to use it to buy something which you may not need.
Train yourself in identifying needs and wants
An easy psychological hack to save is to distinguish between your needs and wants. Often, people end up purchasing items that they can do without, thus missing out on savings. Today, due to the e-commerce boom, most items can be purchased online with a few clicks.
However, once you master the art of differentiating between needs and wants, you will automatically stop splurging on things you don’t want. Remember, every penny saved is a penny earned.
Visualize your future looks in case your save more
If you can visualize how you would look like in the future in case you save more, you would probably know where and how you can save. Create two images in your mind and see how saving more now could alter your lifestyle and standard of living in the future.
Often, we end up spending more thinking that the same income pattern would sustain even in the future. However, a sudden job loss, terminal illness or an accident can hinder income potential and hence, it’s essential to save for the rainy day.
Commit to investment
Investing in the right financial instruments will help you not only save, but also grow your money. For instance, you can set up a mandate with your bank a couple of days later after receiving your salary to invest a certain amount. You can set up systematic investment plans (SIPs) in asset classes such as mutual funds to do so.
These simple psychological tricks would help you save money and be in control of your finances.