3 ways to control your spending in 2014

Science has thrown up some fascinating facts about how the brain operates when we're in consumer mode, and the processes at work when people over-spend. 

Apply some science to control your spending

There are three main factors at work - and to watch out for - if you want to keep spending under control in 2014:

1. Biological Factors: Don’t go shopping if you’re hungry, pre-menstrual or have just emptied your bladder.

You may not realise that your physiology is affecting your behaviour. But when you're hungry you will buy more food and make higher calorific choices at the supermarket. When in an anxious state you will be more likely to impulse-buy. That's because the physical state of high arousal leads to a depletion of the resources that govern self-control. And fluctuations in activity in the brain’s orbitofrontal cortex during the menstrual cycle will make you more likely to go on a spending spree when premenstrual. And more rational and controlled post-ovulation. Even an empty bladder affects your brain’s control mechanisms. Science has shown you’ll be more likely to (sorry) splash out if you’ve just spent a penny. So pay attention to your body before hitting the shops, it may be telling you to hold fire.

Try timing shopping trips with your menstrual cycle and avoid the pre-menstrual phase

2. Emotional factors: Don’t shop if you’ve just had a row, a stressful day or been dumped by your boyfriend.

People experience a range of emotions (anger, fear, sadness) in their daily lives and engage in all sorts of behavioural responses to keep them in check.  Some women find shopping gives them an emotional outlet, the way that alcohol or drugs can do for others. It distracts them from negative feelings and provides comfort in the form of a treat or reward. In fact studies of compulsive buying have shown that its prime function is to repair mood. So spot when emotions are running high and find an alternative way of releasing them. Find  distraction through exercise or relaxation, or seek social support by spending time with friends. Concentration, whether on gardening, painting or rock-climbing, is also a good way to absorb negative emotions. And the Do Something Different approach to behavioural change could help see you through the tough times because it's all about about breaking habits and increasing behavioural flexibility.

Buyer's remorse is like a shopping hangover

3. Cognitive factors: Don’t go shopping with low self-esteem and an “I deserve it attitude”.

Impulse purchases can trigger a lot of self-justification in the consumer, to assuage the guilt of over-spending. Their thoughts echo with the messages that have been implanted by constant brain-washing and bombarding marketing campaigns. Thoughts such as “Why shouldn’t I have it?” “I work hard I deserve it” “My friends will love me for it” and so on. Self-talk can also shift the focus onto the wrong things, “I’m saving £100 by buying this in the sale” (instead of, “I’m spending £200 I don’t have") or even "I'll show him!" Some cognitive reframing can help here. Relabel your credit card your debt card. Silently answer the ad-men back. Recall when you last had buyer’s remorse and tell yourself how you’ll feel tomorrow. And find ways to boost your self-esteem so that you can resist the constant bombardment of persuasive messages. 
Few people greet a large credit card bill with the words, “Because I’m worth it”.

Can happiness be bought, and how much does it cost?

Finally. Sunny days have arrived. People everywhere are wearing less and smiling more. A bit of sunshine certainly does wonders for our happiness. But what does money do for our happiness levels? 

Does money make you happy?

Generally, the research shows that - above a certain level of income - having more money doesn’t make people any happier. Having more friends and better relationships does. But there is a link between financial health and mental wellbeing.

And a lack of money often causes unhappiness. 

So can we spend money in a way that will boost our happiness levels? 

It seems that we can, in these ways:

•      Spend money on experiences rather than material goods and you’ll be smiling more. Happy times leave positive memory traces that we can call up when we’re feeling down; they also connect us to other people which is critical to our happiness. Just going outside for 20 minutes a day has been shown to boost positive mood.
•      Spend money on other people and you’ll feel happier. Yes, even happier than if you spent it on yourself. Treating a friend to breakfast at a local brasserie and having a good chat will bring more joy than another pair of shoes. Being more socially involved has been shown to be worth up to £85,000 extra income. Or spend money on a stranger by paying it forward and see how good that feels.
•      Spend money now that will bring future returns. Most people consume now and pay later. Pay now, consume later and life will seem a whole lot better, spiced up with the anticipation of the joy to come. The brain releases happy chemicals when we are anticipating happy times ahead so max out on lots of those. Even if you can't afford a holiday, just planning a break from work will make you feel happier.
•        Spend on things you love now and again. If something is a special treat rather than part of the fabric of your life, you’ll feel happier if you indulge yourself occasionally. We all like a little luxury now and again.
•             Spend money in ways that brings you more quality time. If your precious spare time is spent cleaning the house, spend money on a cleaner not on a better car. Big house, long commute? A shorter commute and smaller house could be the answer.Or just consider getting rid of your TV and instantly giving yourself more time.

COMING LATER THIS YEAR: In conjunction with Action for Happiness we at Do Something Different are launching a Do Happiness programme, an online programme to boost and spread happiness. Watch this space for more info!

Small changes you can make for a big difference

One of my favourite quotes is

“The price of anything is the amount of life you exchange for it”.

I think it was H D Thoreau who muttered those wise words. And it got me thinking.  

Thinking about how much life gets wasted on meaningless self-lobotomising activities. 

If you add up the hours you’ve spent watching mind-numbing TV, or waiting in for tradesmen, playing Angry Birds or even sleeping, it would add up to years, even decades of your life.

OK, we’ve all got to sleep and personally I love my bed as much as the next woman (or should I say man?). But I worked out that if I made a few small changes to my life the impact could be enormous.

For example, did you know that:

1. If you get up 15 minutes earlier every day you will gain ninety one extra hours of waking life in one year. That’s days and days of extra time!
2. If you save £1 a day every day for two years, you'll be able to travel anywhere in the world.
3. If you write one hundred words a day in two years you will have a full-length novel.
4. If you show real interest in everyone you meet every day, in two months you could have 60 new friends.
5.  If you over-pay on your mortgage by £20 pounds a month you’ll pay off your mortgage 20 months earlier  - and save £5515 in interest alone. (based on 100,000 mortgage over 25 years at 5% interest)
6. If you do one extra press-up every day you'll double your fitness level in 3 months.
7. If you photograph one small thing every day, after a year you'll have boosted your levels of awareness - and have an awesome photojournal.
   
8. If you donate £1.25 a week to Oxfam you will buy 288 buckets of pure, clean drinkable buckets of water a year for a family.
9. If you cut out one can of fizzy drink every day you'll lose 10 pounds in 6 months (without making any other changes).
10.  If you cut out one hour of TV from your life you would have an extra 7 hours free time a week, or the equivalent of two full days extra every month.

It all adds up doesn’t it? Small changes equal big difference. That’s exactly the philosophy beind our Do Something Different behaviour change technique. People make one small change regularly and they tell us a big shift soon happens in their life.

Today I’ve been talking on the radio about me-time. I was supporting a campaign by Palmolive to encourage women to claim back me-time. Unlike blokes, not many women have a shed to retreat to. So the idea is that we can pamper ourselves for 20 minutes a day in the shower (with their yummy Ayurituelsshower gels) and restore our health and well-being. Scented candles, nice music, petals and a glass of fizz are optional extras of course. But think about it, if you have a pampering experience for 20 minutes in the shower every day, you’ll save the cost of going to a spa…

HAVE YOU ever changed one small thing and found it's added up to a big difference?

Do you need some emotional reconditioning when it comes to money?

Whether we’re strapped for cash or mega-rich, our relationship with money can be a highly emotional one. A mere mention of the ‘M’ word triggers all sorts of complex feelings in many people. Why? 

It may be because of the way our parents talked to us about money. Or due to bad habits that we have developed as adults. However, one thing is for sure. If you can improve your relationship with money you’ll feel happier and healthier all-round.

Financial decisions are always rooted in our psychology. Shall I buy this or not? Attack this money problem or ignore it?  Spend for today or save for tomorrow? 

These choices involve a tug-of-war between the sensible part and the emotional part of our brain. The emotional part may be our childish self. The one who wants to leave decisions to someone else. The one that’s scared of responsibility. Impulsive or even greedy.

Many financial decisions involve a tug-of-war between the sensible part and the emotional part of the brain

Giving in to the emotional side can affect our self-esteem as much as our bank balance. It  leaves us feeling empty, anxious or even depressed. These feelings can trigger a spending spree or financial meltdown. Then before we know it we’re caught in a vicious cycle. My research has found eight out of ten women use shopping as a way of treating their moods, so it’s vital to seize emotional control.

In Sheconomics we captured some of the troublesome thoughts women said they have about money. Perhaps you recognise some of them yourself:

• I'm ashamed to own up to not understanding my finances
• I'm totally confused when it comes to making any money decision
• I don't feel grown up when it comes to money
• Money worries keep me awake at night
• I'm scared to face up to my debts
• I’m worried about making the wrong money decision
• I'm embarrassed about how much money I've wasted over the years
• Shopping is how I lift my spirits when I'm feeling low

How many of the above apply to you?  

If it’s three or more you may be letting your emotions rule your money. The emotions that crop up most regularly are fear, guilt and embarrassment which, if not dealt with, risk harming your financial situation. A bad financial situation can affect physical and mental health or damage relationships. That's why emotional management is where financial management begins. 

Frightened about money? Fear leads to paralysis so try these small actions to help beat it:

• ·      Trick yourself into saving by setting up an automatic direct debit into a savings account each month.
• ·      Subscribe to a friendly money newsletter so you are drip-fed with money matters (see www.sheconomics.com).
• ·      Confide in someone who’s good with money, own up to your fears.

 

Embarrassed about money? If you feel ashamed at how little you know or how badly you manage your money, try these:

• ·      Explore a jargon-free website (e.g. www.savvywoman.co.uk or www.sheconomics.com).
• ·      Schedule regular money chats with your partner or close friend.
• ·      Make yourself negotiate a better deal (e.g. on your mobile phone/energy contract) or demand a refund for poor service or shoddy goods.

 
Guilty about money? Guilt can lead to secrecy or pushing money problems under the carpet. Try these strategies:

• ·      Get a sensible money buddy. Shop with them, and talk through money issues too.
• ·      Leave your credit card at home. Carry only the cash you can afford to spend, no more.
• ·      Organise your paperwork into bold coloured files and visit them often.

As well as these, use some emotional reconditioning strategies to help bring the sensible part of the brain back into play. And continue to monitor your money emotions to keep them in check. Try to:

1. Identify the emotion. Be as specific as you can. (Am I ignoring my credit card bill because I’m ashamed of buying that expensive make-up?).
2. Ask where it comes from. The cause may not always be obvious. Is it a reaction to the present or a voice from the past? (My mother always felt bad if she spent money on herself, she made us feel the same).
3. Challenge the emotion. Is it useful now? (My mother had to be frugal  - but as long as I can afford it and budget carefully, I needn’t be so hard on myself).
4. Connect with what you want. Think of a future goal not your current feelings. (I’d like to get the deposit for a house, I’ll feel proud to own my own place).
5. Do something different to act against the emotion and change your feeling. (I’ll pay the bill,  enjoy what I’ve bought, then budget for saving and spending each month).

Finally, for a simple financial health and free practical advice visit www.moneyadviceservice.org.uk

This article first appeared in Healthy magazine May 2012. Available from Holland and Barrett stores or via online subscription.

SIX TIPS FOR TWENTY TEN

This week the media have been dipping into Sheconomics for solid advice - see us on motley fool.co.uk, in Oprah's magazine 'O', in Times on-line and Cosmopolitan to name just a few......

Check out our fail-safe tips for a sheconomical 2010 on handbag.com or read the extract below......

Want to be better with your money? Answer the questions that Karen and Simonne have devised below. If you answer ‘yes' to any of them, take note of the tips and put them on your 2010 to-do list.

1. Are you financially immature?

We think we're grown-up, running a home, holding down a job. And then a money problem comes along and our inner child is unleashed. It's a common problem with women and it can stem from being over-protected when young, or from naively believing things will just work out somehow. The first step to being financially savvy is to be in charge of your money. Make financial independence your goal this year.

Tip: Find out about what you earn and what you owe. Sign up for online banking and monitor your finances regularly. Open bills and statements as soon as they arrive and deal with them.

2. Are you secretly scared of money?

Money is an emotionally loaded topic. Lots of women have fears about money. They can remind us of the doom-laden warnings from our parents. Or can be triggered by the technical language and jargon used by the finance world. Fear stops us taking action, so resolve to be ahead of the game this year.

Tip: Break big goals down into small, manageable steps and take one action now. Own up to the gaps in your knowledge and buddy up with someone who knows. Visit a plain speaking, friendly money website regularly, such as moneymadeclear.fsa.gov.uk. Or talk to a financial coach. If you want to empower yourself - find out how compound interest works (see www.fool.co.uk).

3. Do you have a shopping habit?

Shopping has become the way many women regulate their emotions. Research for sheconomics.com found that women use shopping to cheer themselves up, relieve stress or anesthetise themselves against painful emotions. That heady buzz from spending quickly wears off though, leaving only feelings of shame and guilt. Resolve to get high on life, not high on shopping, this year.

Tip: Know why you shop when you do. Spend only when you need the goods, not the buzz. Find alternatives to shopping that boost mood, like exercise, cooking for friends, dancing or gardening. Deal with your emotions, don't take them shopping.

4. Are you afraid to ask for money?

Women are still paid less than men and are far too reluctant to ask for money. If you undervalue yourself then you will be under-paid. Watch your self-limiting beliefs. Just because you hated maths at school doesn't mean you shouldn't have money. And working your socks off doesn't necessarily mean you'll get rewarded. Payback is more likely if you're upfront and ask for it. Be bolder this year. That includes negotiating for better deals and refusing to pay for bad service.

Tip: Ask for what you're worth and don't be fobbed off. Prepare your case and be proactive. If you've hit an earnings barrier, consider moving. If you're self-employed make sure your rates reflect what you're giving and the time you put in.

5. Are you a ‘live now, pay later' person?

Most women today will out-live the men in their lives. Many will also out-live their own savings. What will you do when you can no longer earn money? The earlier you start putting money away for your dotage, the less it costs you. If you haven't begun, resolve to make a gift to your future self this year.

Tip: If your company has a pension scheme, join it now. Or find out about pension options. Pay yourself first: automatically divert a set amount from your account into a savings or pension scheme every month. Confused by all the options? Just remember, doing nothing is the worst possible option.

6. Are you spending more than you earn?

Being financially savvy isn't about what you earn, it's about what you keep. Salary creep is when our spending rises with our salary, and even overtakes it. Aim to save 10% of your salary consistently. Be ready for those unexpected expenses (the boiler blowing up, car repair, job loss or even pregnancy) otherwise they'll plunge you into debt.

Tip: Track your spending for a month and plug the leaks. Shop around for the best deals on your mortgage, utilities, mobile phone etc. Deal with debt now. Seek help if you're in too deep (see cccs.co.uk for free counselling and assistance). Cut up your credit card until you can afford to pay it off in full every month. Have an emergency cushion equivalent to three months' expenses.

For more tips see sheconomics.com, or read Sheconomics­­ by Professor Karen J Pine and Simonne Gnessen, published by Headline, price £7.99.

Win a copy of Sheconomics - we've got 10 copies to give away! Stay tuned for our Sheconomics money webchat with Karen and Simonne later in January.

Article appeared on handbag.com 31.12.10