Spending Habits: Insane in the Membrane (No, Really)

February 7, 2017

We’ve all heard the adage that “money can’t buy happiness;” but, did you know that the degree to which you buy (#sorrynotsorry) into that notion very much depends on your brain chemistry? Yep, it turns out that a lil’ ol’ area of the brain called the insula may play a big part in whether people tend to be categorized as savers or spenders.

The insula is stimulated when you experience something unpleasant. So, the more stimulation in your insula, the more likely you are to stop the action or behavior that’s contributing to the negative reaction. In translating this to financial habits, those who have more insula activity in their brains tend to be savers, while those with less activity tend to be spenders (at least that’s what the people who know about such things hypothesize). In other words, this area of the brain serves as a sort of built-in budgeting mechanism for savers because the act of spending money, for them, is uncomfortable—and therefore something they’ll try hard to avoid. The act of saving, on the other hand (be it having money in the bank, or getting a good deal at the store), brings a rush of pleasure—the same kind of pleasure, in fact, that spenders experience  with the  instant gratification of buying something new. (Hey, don’t look at us, it’s science).

So, what does all this mean for those of us in the latter category—those whose insulas are all but DOA? Well, it definitely doesn’t have to mean that you’re destined for a life of frivolous spending, mounds of credit card debt, and $0 to your name come retirement. The first (and best) thing you can do is become aware of these tendencies of yours so that you can then consciously reel in the types of behaviors that are causing you overspend.

For all you spenders out there, here are some habits to incorporate that will help you, and your wallet, get on the right track:  

  1. Quit using plastic to make purchases. The swipe-and-forget-about-it mentally that credit cards promote is exactly the opposite of what any spender-in-recovery needs—after all, the pull to have the latest shiny new thing in your hands pretty much immediately is far too great. As convenient as debit cards are, they, too, can be a slippery slope for those who easily succumb to instant gratification. Instead, follow the adage that “cash is king”—nothing will bring you back to reality quicker than seeing your hard-earned dollars literally leave your wallet.
  2. Use the ATM (we know this sounds obvious, but hear us out). OK, so you’re using cash as much as possible—great! When it comes time to replenish, though, opt for an ATM instead of the “cash back” option at check-out. Why? Because again, there’s something very sobering about physically seeing that dwindling account balance.
  3. Share your financial goals with friends. Extrinsic motivation can be great for achieving all sorts of goals—including those that are monetary in nature. Tell your close friends and lovers about the healthy spending habits you’re trying to cultivate, and ask them to keep you accountable.
  4. It’s OK to reward yourself. As you reach your savings goals, give yourself a pat on the back by allowing yourself to spend a (responsible) percentage of what you’ve saved. There’s no need to go cold turkey here, and besides, rewarding yourself with a little spending here and there will keep you from potentially going off the deep-end later on (otherwise known as “frugal fatigue”—and yes, it’s real).
  5. Think of “future you.” As difficult as it might be right now, try to think long and hard about your long-term goals—not just five years down the road, but ten, twenty, third years. Hey, you’ve got a pretty awesome life; don’t you want “future you” to have the same? With everything that we can never know, of one thing we can be certain: we can never be too prepared for that which is yet to come.

NOTE: A big shout out to Money Crashers for the great money-saving tips that inspired this blog post.