This week, UBank launched the Science of Spending & Saving Report to help Australians understand how the brain works when it comes to making financial decisions.

Based on the results, we’ve created some exclusive tips just for you to help you put the findings to use in your everyday lives.

More about the research findings here.

•   Meet your future self

The experiment demonstrated that once someone had “met their future self” there’s a 72% chance they will make smarter saving decisions.

Take a look at the Face App in the iOS or Android stores. You have the opportunity to age a photo of yourself, just like the participants in the experiment did, and use it to help you make better decisions.

•   Physically visualise your saving goals

By simply visualising your saving goals and viewing them regularly, you can help train your brain to achieving that end goal.

This can be as simple as printing a picture and sticking it on your desk or fridge or using it as your phone’s lockscreen.

Whether it’s a new car, a holiday or your dream home, seeing the visual regularly can help you achieve your goal.

•   Make saving a habit vs a chore

Many Australians don’t get joy in moving money into their savings account and fall into traps of over-spending.

So, the trick is to make it a regular habit.

Research has shown that it takes the average person 66 days to turn a new behaviour into a habit. So, rather than jumping head-first into an extensive savings plan, on day 1 you can start small.

This might mean putting $2 a day into your savings account for the first week then doubling it every week until you reach your weekly savings goal.

A habit like this will train your brain to put money away with a schedule and ultimately make it a habit.

•   Cash is king

While we are using physical cash less and less, it can actually be a helpful tool in saving.

Psychologically, it’s easier to spend money that’s on a credit card as you don’t see the money leaving your hands.

Moreover, there is no immediate impact or regret as debt simply compounds over the month.

By simply withdrawing cash from an ATM and using that for necessary spending, you will feel less inclined to physically handover notes.

Furthermore, holding high value notes (e.g. $50 or $100) can prevent spending as you feel less inclined to break them.

•   Write down what you’re spending and share with a family member or friend

The latest research shows that our social connections powerfully shape the value we assign to our spending.

Giving someone else visibility to your spending habits will help keep you more disciplined about your money. You can even use a mantra of “what would my partner think of me spending money on this?” to force your brain into thinking differently and prevent unnecessary purchases.

Impulse spending relies heavily on emotions and if you’re forced to track all your spending habits and share them, the thought of this can take the joy away from the purchase. 

•   Visualise your ‘future self

Try this simple exercise: write down 2 things about yourself that won’t change between now and 10 years from now and place it somewhere that you will see it every day (on the fridge, your desk, in the car etc).

For example, you might write “In 10 years’ time I’m still going to have a great sense of humour”. The more closely you can connect with your ‘future self’ the better future-focused decisions you’ll make!

•   Don’t keep large amounts of money in an account linked to your debit card

The ease of tap-and-go payments is very convenient but it also makes spending faster than ever before.

To limit spending, keep all your money in a savings account and if you do want to spend, transfer money to the account. The hassle of having to transfer money ongoing will limit your spending and reduce impulse purchases.

Shameless plug – when you link a USpend transaction account to your USave savings account, our exclusive technology will do this for you.

UBank’s Sweep Technology automatically moves money between your linked transaction and savings accounts each night, based on the limits you set, without you having to lift a finger. Then if, for some reason, you need to spend a bit more, depending on the type of transaction, Sweep will also automatically move money from your savings in real time, so you won’t be declined or overdrawn. But you will be able to earn maximum interest on your savings.

•   Make financial decisions when you’re in a positive headspace

Spending money can be an emotional experience and many people spend money to try and make themselves happier. This can cause excessive spending and create debt.

If you’ve had a tough day at work or you’re feeling stressed, limit spending until you’re back in a positive headspace.

Impulse purchases will only provide short term relief and the weight of the debt will come back to haunt you when bills need to be paid.

If you’re not in the right headspace, try calling a friend or family member for advice or going for a walk to clear your head. Doing this can be a great way of relieving stress and levelling yourself out.