Weird Ways Our Brains Control Our Money Habits
Weird Ways Our Brains Control Our Money Habits
Written by Kristin Wong | Published: 09 July 2014 – Updated: 20 November 2018
I'll admit it. I'm a sucker for money psychology studies. And it's not just because I write about money. On a sheer curiosity level, they're fascinating. But they also serve as a great reminder that money is more about mind than it is about math.
It's interesting to see exactly how our brains work when it comes to habits like spending and saving. And not only is it interesting, it can be helpful too. Understanding how we're wired helps us have a better understanding of our own individual money habits. This is why articles on sneaky marketing tactics are so popular — they're helpful! It helps to know how our subconscious is manipulated to spend more so we can consciously do something about it.
I was impressed when April Dykman wrote about Keith Chen last year. He's the behavioral economist who studies the link between language and savings rates. Basically, Chen's findings were enough for him to assert:
“If you speak a language that doesn't distinguish strongly between the present and the future, you save a lot more because the future feels closer. If you speak a language that separates present and future events, the future feels more distant, which makes it harder to do things to care for your future self like save money, exercise, and eat better.”
Obviously, this isn't to say we should all change the languages we speak to get rid of our concept of the future. We've talked about linking our present and future selves before, and it does help to be aware that our language can be yet another barrier in doing this. But it doesn't stop there. I've come across quite a few seemingly “weird” ways our financial habits are affected. Here are three more that I came across recently.
Disorganization leads to impulse spending
Here's one advantage to being a neat freak, I guess.
Researchers from the University of British Columbia and the Cheung Kong Graduate School of Business found that a disorganized environment can lead to impulse spending. According to the Chicago Tribune:
“…in experiments the authors found that people in a cluttered room were more likely to pay higher prices for products, such as a TV or movie tickets, compared with people in an organized room, according to the study, ‘Environmental Disorder Leads to Self-Regulatory Failure.' Researchers predicted that if a person was responsible for his or her own messy environment — rather than ones created by researchers in the experiments — the effect would be even more depleting to their self-control.”
To continue reading, please go to the original article here:
https://www.getrichslowly.org/weird-ways-our-brains-control-our-money-habits/