How to Save Smarter

In the Parade magazine, in Sunday’s newspaper was an article, How to Save Smarter

Some highlights are:
Behavioral economists-researchers who mix psychology and economics-have uncovered three reasons why people find it so difficult to save. The first is temptation: Although we often later regret it, we just can’t resist spending. The second is lack of understanding: Our brains can’t quite grasp the profitability of saving. The third is optimism: We believe that everything will work out, even if we don’t save.

Temptation can be countered if you make saving as much fun as spending. They found that imagining a future purchase is almost as good as getting it.

Saving is much easier when it’s for something specific. They suggested you set up a separate savings account for each of your goals.