Despite proper budgeting and cutbacks on spending, it is sure that every individual has faced a scenario where they ask themselves, “Where did all my money go?”
It may be surprising but researchers are starting to understand that the reason seems to lie in psychological impulses and blind spots.
Based on our mental wiring, we are great at projecting future income but terrible at accurately forecasting our future expenses. Thus creating an unrealistic budget in our minds.
It is also a fact that people have a tendency to make impulse purchases to reward themselves even at a time when they are supposed to be saving.
Making purchases on credit instead of tapping savings is also a choice that costs more money when someone unconsciously places high value on seeming financially responsible.
Researchers say the following: give future expenses more weight, know the cost of feeling sound, stop spending to reward yourself, and mind your mood when spending.
