Tried to record expenses, to table the budget and to defer 10% of salary in the Treasury, and to raise a decent amount and came? Tell why people make an emotional purchase instead of save, and what to do with the money now that a few years to be in the black.
Why not work to save money
That we respond to advertising appeals and can quickly decide on an unplanned purchase, blame the long and complex evolution of humans as a species. The conditions of life of our ancient ancestors were so cruel, that to postpone for tomorrow the piece of meat was equivalent to say farewell to him. Meat, and the person tomorrow, or even today could eat another predator. Having lived hundreds of thousands years in such a reality, we learned how to take, when given, and escape the beating. It is not surprising that humanity is now difficult to overcome their primitive instincts. However we are reasonable and have sufficient mental capacity to make sound and informed decisions.
The winner of the Nobel prize in Economics 2002, Daniel Kahneman argued that decision-making in the human brain respond to two systems.
Actions in the framework of system 1 are fast, automatic, effortless, associative and difficult to control or modifiable. Actions in the framework of system 2 are slower, serial, requires effort and consciously controlled. In addition, they are relatively flexible and potentially subject to the rules.
System 1 is responsible for the emotional aspect of decision making. It is represented by an adjacent core (where a lot of dopamine — the hormone of joy and pleasure), the amygdala (responsible for emotions, including fear) and orbitofrontal cortex (performs the functions of an arbitrator).
All together it works like this. Suppose you saw on the counter of trendy sneakers, at the same moment the nucleus accumbens overreacted, because they are beautiful and desirable. The amygdala also showed activity: price of new shoes is quite high, fear to remain without money for other needs is very strong. At this point, the orbitofrontal cortex compares what is more, the desire or fear, and the verdict. All processes occur so quickly that you don’t control them, but in the end you get the answer to an irrational system 1.
How to learn to save
In contrast to system 1 Daniel Kahneman brings the system 2. It is responsible for common sense, intelligence, awareness, judgment, long term planning, presented frontal area of the brain, the so-called dorsolateral prefrontal cortex.
Of course, it is intertwined with your emotional partner. The more man developed one system, the weaker the other. So, thinking about your choices and weigh decisions, you literally pumped mind. But this takes time. To system 2 won in the struggle for the final decision, give the brain time to evaluate the usefulness of spontaneous purchases, and yet do read the reviews about the quality of the product. By the way, there are other tricks.
1. Pay for the most necessary immediately after salary
Each of us has a basket of mandatory payments, e.g., utilities, loan installments or for the education of children, medical or car insurance. All of this must be paid in the first few days after payday. Otherwise, your idea of how much money you can spend without compunction, will be incorrect. In addition, if you make the required amount immediately, the risk of overdue and shlopotat penalty will decrease significantly. Not to forget about all of this, set up automatic bill payments in your online banking.
By the way, to defer to the Treasury also better immediately after the refill. If you know how much free money left until the end of the month, to conduct inner dialogues about the virtues of impulse buying and iron willpower would be easier.
With the help of a policy of life insurance from the company “Renaissance Life”, you can not only protect your budget in case of unforeseen circumstances, but also to save up for something that has long dreamed of. The program is “Valuable asset” is designed for 5 years. At the regular annual contributions you receive to 10.7% of the guaranteed income. And due to the tax deduction in the amount of 4.3% is your effective yield will increase to 15% per year. To start saving can, saving only 3 000 rubles per month. If you pay the fee the day does not work, the company will provide a two-week period for insurance payment.
2. Make fear your ally
Ekaterina Denisenko / Lifehacker
In Commerce fear works as a double agent. It attracts and assures that you will miss a very good offer, if you do not buy a product right now. This is indicated by the nucleus accumbens. At the same time, fear to spend a large amount of, for example, in new clothes enables buyers common sense. For it plays the amygdala. How to entice an agent on your side and make orbitofrontal cortex to make the right choice?
First, always remember that fear is a convenient tool of manipulation. If the store you suddenly wanted urgently to buy a product, because it seemed that he would soon understand, then think twice how real is this perceived deficit. For example, when the rate of change of the ruble in the country or experience other problems, people are massively buying home appliances and products that have a long shelf life. And then not know what to do with five televisions and twenty pounds of buckwheat. Therefore, it is important to make sure that the purchase you really need and no one is trying to manipulate you.
Second, think about how much money you spend on small but frequent purchases. A simple example: calculate how much per year you spend on daily espresso before work. For example, a Cup of coffee costs 120 rubles. In 2020 247 working days. Buying refreshing drink on the way to the office, you spend a total of 29 640 rubles. Of course, we did not take into account vacation, sick leave or business trips. But certainly in some of the difficult everyday life you drink more than one Cup. When you realize the scale of the spending, think of what you would spend the entire amount. And coffee can be prepared at home and a travel mug.
3. Take a time‑out before the reckless spending
Use the mechanism of the impact of fear in their interests. If I saw an attractive product, walking around the shops, do not rush to the checkout. Adopt a rule to buy an unplanned item only after you give yourself time (an hour or two or three or maybe even a whole day) to think, to analyze the need to purchase and read the reviews about the quality of the product. Use time‑outs before you buy, give “reasonable” part of their brain to do the work for you, win for her. Fight the momentary whims of their methods.
4. Wait tomorrow more than today
Ekaterina Denisenko / Lifehacker
In our minds to delay is to deny ourselves pleasure, but it is painful and unpleasant. “Anesthetize” the process will help small trick: try to trick your brain pattern “the next time will be more.”
Here is an example. If the income your family is growing by 10-15% a year, then start saving first 1% of salary every month, then gradually increase to 3, 7, 10, 12, 15%. The essence of this method is that you know and understand that we can replenish the Treasury of 15% of salary. But it will significantly affect your wallet. And getting used gradually, step by step, you will come to the final figure without indignation at the austerity measures. In addition, this scheme will help not to miss any contributions to the piggy Bank in difficult months.
5. Make your money work for you
To monthly not tear from the heart the hard-earned, you can put money on Deposit, to purchase bonds or stocks. In each case their advantages and disadvantages.
A fairly simple and straightforward way. On average, banks are now offering income from deposits in the amount of 4-6% per annum. The part will absorb inflation (in 2019 amounted to 3%), and that will be all yours. This option is more suitable for those who want to save money, not to increase it.
- Advantages: simplicity, stability.
- Disadvantages: low yield.
These documents indicate that the company (or the government in case of Federal loan bonds) took your money in the debt and in return agrees to pay interest and to return the entire loan at the end of the contractual period. In most cases, one bond is worth a thousand roubles. And the average yield on Russian bonds and approximately 7-12% annual.
- Advantages: experience in managing capital, learning a new financial instrument.
- Disadvantages: low yield.
Acquiring shares of a company, you have the opportunity to participate in the management of the firm and claim to be part of its profits. You can also trade stocks and earn on the price difference.
- Advantages: high dividends when buying shares of financial a successful company.
- Disadvantages: the need to carefully study the dividend policy of the company for previous years, high risk of losing money in speculation.
A policy of life insurance
It is a financial product that combines savings and savings. Its essence is that a person insures his life for a certain period of time (usually from 5 to 15 years) on time and in full to pay dues. If the period of validity of the policy the policyholder dies or is seriously ill (conditions may vary), the company will make payment to him or specified in the contract beneficiaries. If he can survive to the end of a specified period, while you made them money with interest or investment income.
- Advantages: not just money saving, but life insurance. These funds are not included in the inheritance, they can not be confiscated, divided in the divorce, to impose on them arrest, or to recover on the court. Even among the indisputable advantages of tax deduction.
- Disadvantages: the tax deduction can be issued only if the official average monthly salary is not less than 10 thousand rubles; obligation the timely payment of premiums (otherwise, the contract is canceled and previously made, the amount will not be refunded); cases that occurred in the Commission of a criminal offence or in a state of intoxication shall not be considered insurance; in the classic version of life insurance savings contracts there are no significant income.
With the program of life insurance “important asset” for five years, collect a sum for the education of children or increase your own skills, get start-up capital for the purchase of an apartment or a weighty contribution to the pension Fund. An annual fee in the amount of 30 thousand rubles is guaranteed to be repaid in five years with a gain of 10.7%. And given the tax deduction, the income will be 15%. Payments can also be made on a monthly basis, but in this case, the guaranteed percent of income will decline to 8.2%. In the amount of the tax deduction will amount to 12.5%. In both variants provides protection against inflation. To execute the contract online.
Learn more about “Valuable asset”