The act of spending and saving money is strongly connected to our emotions, so it’s important to understand how our brains work if we want to save successfully.

According to research, 51% of working-age people in the UK have less than 3-months’ wages available in savings* – the amount that’s regularly recommended to have on hand for a rainy day.

But why do we find it so hard?

It’s natural to get a good feeling from spending money, but it makes it difficult for people to save and miss out on that instant gratification. Vicky Reynal, financial psychotherapist and author of Money on your Mind: the psychology behind your financial habits, has explained why we find savings so difficult. She comments:

“Saving might trigger a sense of pride – because we are looking after our future selves – but it is hardly as psychologically rewarding as the pleasure of instant gratification (which is both psychological and physiological and potentially addictive).

Saving is also hard because many people use money to address emotional needs: they might spend to impress friends because they don’t feel good-enough; or spend on their children to compensate for what they haven’t given emotionally; or spend to cope with sadness, boredom or lonely feelings. So, there might be a psychological relief through spending when we use it to address emotional needs - even if it’s not effective in the long term and financially harmful.”

Darlington Building Society has curated a list of five top tips to help save successfully:

1. Set small manageable goals

The most manageable and effective way to save is by setting small goals. Focusing on a large sum of money often feels overwhelming; by setting more achievable milestones, you can celebrate your progress more frequently. This will boost your confidence and give you the motivation you need to keep working towards your goal.

2. Get visual with your savings

If you’re on social media, there’s a chance you’ve stumbled across ‘cash stuffing’ on your feed. This is where you allocate monthly budgets for expenses and savings, putting corresponding amounts into individual envelopes.

This is a great way to save as it makes you more deliberate about your monthly budget. The act of physically putting money away limits impulsive spending as the cash has already been mentally allocated.  Another way you can visually track your savings is with a savings account that comes with a physical passbook which gets updated every time you make a deposit. This can also be used alongside cash stuffing, especially if that savings envelop is calling your name.

Vicky Reynal adds: “Techniques like Cash Stuffing make the reward very visible, generating a sense of achievement and motivation. But most importantly, it makes denial (a common psychological defence when it comes to money) more difficult. As the action of paying and the depletion of our cash reserves has become very disconnected (as we moved from cash to cards to e-wallets), denying the reality of the impact of our actions has become easier. We can more easily keep ourselves unaware of the impact of our spending on our savings. Physical passbooks change that: they make us unequivocally conscious of the impact of our actions saving/spending in a way that is undeniable.”

3. Be aware of emotional spending

Buying new things can make you feel good and give you a boost. Whether it’s large or small treat, the numbers add up. If you feel in need of a pick-me up and your partial to purchasing something to give you a boost, try going for a walk, meeting up with friends or watching your favourite TV show instead.

4.  Make a note of all spending

When it comes to money, we’re all guilty of falling into the trap of what psychologist’s refer to as ‘mental accounting’. This is when we apply subjective value to money, which is usually not beneficial to our saving habits. You need to understand the true patterns of your spending by logging everything you need to spend in a month – like a savings passbook, it’s a visual reminder and may make you think twice about those little purchases that can quickly add up. 

5. Save with a purpose

When it comes saving, it’s important to set a clear purpose for putting that money away. Saving with no clear benchmark makes it difficult to make decisions around contribution levels and easier to take money from your savings pot as and when. When you know what you’re trying to achieve, the process of saving becomes easier mentally and will help you stay on track.

Head to Darlington Building Society’s Savings Hub to supercharge your savings. Set your savings goals on our savings calculator, book your free financial wellbeing review with our experts to make your savings work harder, and much more: Savings Hub