Question
Why do I find it so hard to save money? Are there any psychology tricks and tips to avoid spending unnecessary money?
Answer
Philipe Bujold has some good news for people with this problem...
Philipe - The answer is yes. There is a very unique psychological concept that I like to use a lot in my daily life, and that’s friction. Anything that is harder to do usually we will associate that with the cost and we will not do it.
Chris - So put more velcro on your wallet?
Philipe - Yeah. Stuff like that, obviously. But also, if you have a bank account that directly takes money for your savings, taking that money out of your savings is just that tiny bit of effort that you might not want to do. That’s why pension plans have money that goes in automatically because people have that friction to take it out. So that’s a really good way of doing it, or simply applying yourself in advance. Let’s say making sure and finding a means to promise to yourself that you will do it, so if you lock the money away completely - you can’t touch it. That’s a very good way of doing it! But, yeah, friction is probably the best way at the moment!
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