“I’m saving for a rainy day”, “I’m putting a bit aside”, “This is for emergencies only” – when it comes to regularly saving money into a bank account, our good intentions are frequently linked to big ambitions, whether that’s a deposit for a house, a holiday, a big celebration or more abstract ideas of what we might need for a financially secure future.

In the UK, 42% of women and 33% of men surveyed by YouGov said saving money or saving more money would be one of their New Year’s resolutions for 2018. If saving can bring such lofty rewards, why, when we have the opportunity and means to do it, do so many of us struggle to keep that resolution?

Resolutions and post-it notes

Knowing and understanding your personality traits

To understand our attitude towards saving identifying your financial personality is a good first step, as Dr Frank Ryan, author of Willpower for Dummies, says: “Impulsive or excessive spending is a product of the interaction of several personality traits. A cluster of characteristics linked to impulsivity, seeking out exciting new experiences and being social or a ‘party animal’ are linked to excessive spending. In contrast, personalities that prefer familiarity, planning ahead and predictability are more likely to be savers than spenders.”

Accepting your financial personality traits is important – you’re more likely to be able to manage them or develop coping strategies than completely change your personality. If you are an impulse buyer or compulsive spender this behaviour can be hard to stop. Simply changing the brand you buy or where you shop, for example, might not be enough to curb your habit. Experts suggest that tracking your spending can remove some of the emotion from it. Forcing yourself to write it down every time you spend, for example, turns the action from something compulsive to something rational. Our Spending Insights can help with this: they’ll show you how your spending is changing from one month to the next across 10 spending categories, such as travel and lifestyle. You can also break down what you’ve spent by merchant to show you which shops, brands or services are part of your habits.

The role of emotion

It’s not just our enduring personality traits that can make saving so hard – how our emotions influence our spending plays a big role too. Paying on credit is less painful, for example, while paying with cash makes us confront uncomfortable feelings about our finances. Credit can help us delay the pain of spending and the rise of cashless payments has given us another new way to push those negative feelings away. However, paying on credit and increasing your debt can create financial stress that may ultimately outweigh the fleeting happiness you felt at the moment of spending. Real-time notifications through your app are a great way to address this issue in a contactless world as it reminds you of what you’ve spent as you’re spending it.

How can age and generation affect your approach

Experts suggest that your age and generation’s experiences will affect how you feel about and approach saving. Millennials prefer to spend their money on an experience rather than something they can own and typically prioritise short-term over long-term saving. Other factors, such as student debt, expensive housing and higher living costs, eat into their income and make it harder to save than previous generations.

Psychologist and author Karen Pine, has previously written about how our upbringing can influence our attitudes to saving and spending money. What you were told about money as you grew up and whether you had a strong financial role model can affect how you handle money and your saving behaviour. Many of us, especially those aged under 24, have grown up in a world of instant gratification – from next-day delivery to contactless payments. Without realising it, this environment can make spending increasingly attractive and strengthen its hold over us.

Social networks on mobile phone

Social media influence

Many of us play out our daily lives on social media – another factor that previous generations have not had to contend with. Research suggests that seeing pictures from friends’ holidays or posts bragging about expensive experiences can prompt us to opt for spending now over saving for later. In a 1,000-person study, 30% of respondents said social media had influenced their spending decisions and 39% said seeing other people’s holidays and purchases on social media made them consider similar spending. As our friends and networks use social media to share exciting purchases and experiences, spending on such high-end purchases becomes normalised – saving is not shared or lauded in the same way. One way to celebrate saving or change that temptation to spend competitively into a saving habit could be through our Goals feature. Setting up savings targets, labelling them and adding pictures, such as “Holiday to Spain” or “new laptop”, makes saving into a game – as you add more to each target you can see how you’re progressing and getting closer to that prize.

Tap into that future happiness

What we say doesn’t always match up with what we do – even if we consider ourselves a saver or say we enjoy saving more than spending our actions might tell a different story. Saving can create “anticipatory happiness” – we are putting money aside for something that could bring us joy or change our lives for the better. Tapping into this future happiness can encourage us to get better at saving money, which is why setting saving goals is so important. This can be difficult to do simply because it’s harder to imagine our future than it is to just deal with the present and what’s right in front of us demanding our attention. This lack of empathy with our future selves leads to spending rather than saving.

Handwritten savings tracker

Seeing past the present into the future

Take people’s retirement savings, for example. Government analysis suggests that 31% of the UK population have no private pension savings and that around 12 million people (about 38% of the working population) are under-saving for retirement. Simply put, someone in their 20s in their first full-time job may struggle to think ahead to the end of their working life and save accordingly, while for the older generation, who are closer in years to the state pension age, the idea of retirement and the savings required to fund this will be easy to imagine and far more pressing.

Sendhil Mullainathan, professor of economics at Harvard University, describes this as scarcity of attention – an inability to see or a combination of circumstances that blinds us to what’s really important, trapping us in the present. Even when we may have an opportunity to save more – we get an unexpected windfall or a bonus at work – we tend to forget how things felt when money was tight, a different point of scarcity, and again concentrate on how we can spend in the moment rather than save for the future, he says.

When it comes to saving, there’s a lot we have to contend with, from our emotional state and attitudes to money to rewiring our brains to think more about the future and avoid the pull of the present. We want to help make managing your money and understanding your spending habits easier. With crucial insights and features that allow you to track your spending and set saving goals, it’s a new opportunity to tackle the psychological factors that we all face which can make saving so difficult.

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