If you’re seeking to turn over a new financial leaf, it’s not enough to simply examine a snapshot of your current circumstances and smooth things out around the edges.
Achieving lasting and effective positive change will require you to trace your "money story" back to its very beginnings.
"Some things related to money management are part of our personality," explains Sarah Newcomb, a behavioral scientist and author of Loaded: Money, Psychology, and How to Get Ahead Without Leaving Your Values Behind. "Others are inherited or absorbed from our surroundings as we grow up — and the same circumstances can produce very different results, depending on the person."
Which is to say, each person’s perspective on money has been shaped by a unique mix of factors including family attitudes, peer influence, individual experiences, historical forces and our own always-evolving approach to decision making.
In reforming long-held spending habits and navigating your financial ship to calmer (and more prosperous) waters, "The why is often just as important as the what," Newcomb says.
Embrace small money hacks for big savings
As you work to disrupt your more deep-seeded spending habits, it’s important to remember that saving more doesn’t necessarily require a complete lifestyle overhaul. Introducing smaller hacks can be a means to make progress and score some quick, momentum-building wins. Ideally, the hacks you undertake should suit your spending personality.
To save more, understand why you spend
Newcomb believes our individual spending personalities exist on a spectrum that can be broken out into six groups:
Selfless Spender
Defined by: A tendency to spend generously on others.
What it means for your money: Spreading the financial love with others may stretch you thin with little money left to save.
If you're a selfless spender, try to:
Launch a money-saving challenge. Give friends and family a heads-up that you’re focusing on saving and ask them to join in. When your tendency to treat others arises, you’ll have a support system helping to curb the behavior.
Give yourself spending limits for gifts. Shopping with only a set amount of cash on hand may help to keep overspending inclinations in check.
Status Spender
Defined by: Spending that’s driven by a desire to keep up with the latest trends.
What it means for your money: The focus on right now can potentially leave you unprepared for emergencies or longer-term goals such as retirement.
If you're a status spender, try to:
Institute a 48-hour rule before you buy. Delaying gratification gives you a cooling-off period to think the purchase through and determine if it’s something you really need.
Consider using a shopping app that tracks items on your to-buy list. Look for one that shoots you a heads-up when a must-have item goes on sale.
Spontaneous Spender
Defined by: Buying smaller items you don’t necessarily need, on impulse.
>What it means for your money: Small purchases can eventually add up to one big shortfall in your savings plan.
If you're a spontaneous spender, try to:
Create a savings match. Each time you spend money on unnecessary items, transfer that same amount to your savings.
Check retailer return policies. Consider using apps to help keep track of purchases and receipts — which typically include return policies — so you can view them at a glance.