CalmCalmMMomoment.coment.com 9933Psychology, University of Hertfordshire, is
because spending is so much easier than
saving: it seems that we’re naturally more
disposed to go for the instant hit – a coffee,
a night out, a takeaway – than the longer-
term option of planning for our futures, be
that setting up an emergency fund, our
retirement or a mortgage.
Graham Bentley, an expert in behavioural
finance and the psychology of investing, and
the founder and MD of investment marketing
consultancy, gbi², puts it another way. He
says that spending is gratifying, specific
- what we want is right there in front of us –
and delivers immediately. Conversely, the
rewards of saving are delayed and often
attached to abstract ambitions – someday,
who knows when, we’d like to have our own
home, or be able to take a year off work to
travel. The future is nebulous; the present
tangible, and we want our treats and our
good times in the here and now.
“We know that abstract objectives are
difficult to plan for without a specific target,”
says Bentley. “Without a savings ‘habit’
people will prioritise near-term goals and
put off long-term investing and saving until
it’s too late.”
James*, is all too familiar with this
scenario. “My parents tried to encourage me
to save for things, but to be honest, they were
probably too indulgent. I’m an only child and
for years was an only grandchild, too, so
I pretty much got what I wanted, when I
wanted it. I had friends who did chores for
extra pocket money, and who were taught
to save, but my parents never enforced
anything like that.”
As an adult, James says he made the
mistake of thinking that living in the moment
and planning for his future were mutually
exclusive, so he made no provisions
whatsoever. “It pains me to think of the
money I’ve spent without having anything
to show for it. I want to propose to my
girlfriend, but I can’t just yet because I can’t
afford to buy her a ring and I want to be
traditional about it. Having that incentive is
helping me spend consciously and cut out all
the frivolous, needless purchases that I used
to make several times a day. Now if I want
to buy something, I ask myself one simple
question – ‘do I need this?’ If the answer is no- which it invariably is – I put my wallet back
in my pocket and walk away.”
James’s comment about his upbringing
echoes what psychologists have believed for
a while – that our attitudes to money, like
so much else, are shaped by our childhoods.
“Our relationship with money can be very
complicated,” says Dr Roz Halari, clinical
psychologist at Cardinal Clinic and research
fellow at the Institute of Psychiatry, Kings
College, London. “It’s deeply rooted in our
psychology. We see people who hoard it, but
seem incapable of enjoying it, and we see
others who have enormous difficulties
keeping hold of it beyond pay day. How
“Our attitudes to
money, like so much
else, are shaped by
our childhoods”
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