The psychology of saving and starting a positive savings habit
3 minute read
The psychology of saving and starting a positive savings habit
3 minute read
Have you ever wondered why you spend – or save – the way you do?
You might be surprised to know that there's little bit of science behind it. Lots of different things can influence what we do with our money. Our financial situation, whether we were exposed to budgeting tactics growing up, or even our understanding of how finances really work, can all have an impact on our ability to save. And we can't forget about wider economic events like the cost of living crisis too.
But our ability and willingness to save for the future can also be down to psychology. Are you someone who likes to splash the cash the minute pay day rolls around? Or do you relish being able to put money aside every month?
Below, we've explored the theory around 'financial psychology' and have shared some steps you can take to improve your money management skills.
The psychology of spending
One way to improve your ability to save is to find out what triggers you to spend. Different psychological influences can encourage us to part with our hard-earned cash. These include:
- The Bandwagon effect – doing something because others are doing it
- Nudge theory – when we're influenced to choose one option over another
- Anchor bias – when we favour the first item we see and buy it even you could find a better deal
- Retail therapy – when we spend to cheer ourselves up.
Our spending is often closely connected to how we feel. There's nothing wrong with occasional impulse purchase – after all, treating ourselves is part of enjoying life! But knowing these triggers can help you to take a more balanced approach.
Set sunny goals and track your spending
Too often, we think of saving as making sacrifices. Whether that's giving up our morning coffee or cutting down on meals out, the impact of losing something you love can make saving difficult.
But you don't just have to save for a 'rainy day.' While it's important to make sure you're covered for an emergency, it’s good to save for a 'sunny day' too. Put money aside for a summer holiday, a weekend away or a festival with friends – the things you know you’ll enjoy. This way it won't feel like a chore and can help put you on the path to building a good savings habit.
It's also important to track your spending. To get a better idea of where your money is going, look back at your spending over the past few months to see where savings can be made. There are financial apps available – like ours! – that can help you check where your money is going each month and spot unnecessary spending.
Celebrate the small wins
Why not reward yourself when you hit your targets? Treating yourself to a nice meal, a trip to the cinema or a day out, could help you to stay motivated to save.
At Coventry Building Society, want to help everyone build healthy savings habits.
- Our Regular Saver allows you to build up a savings pot by setting aside up to £500 a month for 12 months at a variable interest rate.
- And our Young Saver account rewards savers between 7-17 years old when they reach specific savings milestones, with items like stickers and stationery.
Train your brain
Even if you're a natural spender, you can train your brain to embrace saving. Understanding what triggers your habits, setting short- and long-term goals for the future, and celebrating the small wins can all help improve the way you approach saving.
If you want to learn more about how you can start your savings journey, we're here to help. Visit our Knowledge Centre to find out more.
Published August 2024
Updated August 2025
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Find out how your money can contribute to something purposeful.
Enjoy lifes memorable moments
We’ve all heard about rainy days, but are you saving for your sunny days?
Have you ever wondered why you spend – or save – the way you do?
You might be surprised to know that there's little bit of science behind it. Lots of different things can influence what we do with our money. Our financial situation, whether we were exposed to budgeting tactics growing up, or even our understanding of how finances really work, can all have an impact on our ability to save. And we can't forget about wider economic events like the cost of living crisis too.
But our ability and willingness to save for the future can also be down to psychology. Are you someone who likes to splash the cash the minute pay day rolls around? Or do you relish being able to put money aside every month?
Below, we've explored the theory around 'financial psychology' and have shared some steps you can take to improve your money management skills.
The psychology of spending
One way to improve your ability to save is to find out what triggers you to spend. Different psychological influences can encourage us to part with our hard-earned cash. These include:
- The Bandwagon effect – doing something because others are doing it
- Nudge theory – when we're influenced to choose one option over another
- Anchor bias – when we favour the first item we see and buy it even you could find a better deal
- Retail therapy – when we spend to cheer ourselves up.
Our spending is often closely connected to how we feel. There's nothing wrong with occasional impulse purchase – after all, treating ourselves is part of enjoying life! But knowing these triggers can help you to take a more balanced approach.
Set sunny goals and track your spending
Too often, we think of saving as making sacrifices. Whether that's giving up our morning coffee or cutting down on meals out, the impact of losing something you love can make saving difficult.
But you don't just have to save for a 'rainy day.' While it's important to make sure you're covered for an emergency, it’s good to save for a 'sunny day' too. Put money aside for a summer holiday, a weekend away or a festival with friends – the things you know you’ll enjoy. This way it won't feel like a chore and can help put you on the path to building a good savings habit.
It's also important to track your spending. To get a better idea of where your money is going, look back at your spending over the past few months to see where savings can be made. There are financial apps available – like ours! – that can help you check where your money is going each month and spot unnecessary spending.
Celebrate the small wins
There are proven benefits to being a regular saver. No matter how much save, setting a clear, achievable goal will give you a reason to set money aside. This can help you break down larger financial aspirations into more manageable steps.
Why not reward yourself when you hit your targets? Treating yourself to a nice meal, a trip to the cinema or a day out, could help you to stay motivated to save.
At Coventry Building Society, want to help everyone build healthy savings habits.
- Our Regular Saver allows you to build up a savings pot by setting aside up to £500 a month for 12 months at a variable interest rate.
- And our Young Saver account rewards savers between 7-17 years old when they reach specific savings milestones, with items like stickers and stationery.
Train your brain
Even if you're a natural spender, you can train your brain to embrace saving. Understanding what triggers your habits, setting short- and long-term goals for the future, and celebrating the small wins can all help improve the way you approach saving.
If you want to learn more about how you can start your savings journey, we're here to help. Visit our Knowledge Centre to find out more.
Related articles:
Planning ahead for a lower interest rate environment
What do you need to think about when interest rates start to drop?
Published August 2024
Updated August 2025
Related articles:
How can your savings have a lasting impact?
Find out how your money can contribute to something purposeful.
Enjoy lifes memorable moments
We’ve all heard about rainy days, but are you saving for your sunny days?
