Save like cavemen

Nigel Latta analyses our Stone Age gray matter

Kiwis save around 2 per cent of their incomes. That’s maybe not surprising as our brains have an automatic aversion to saving.

For most of human existence, the most saving you did was you cut off a bit of the mammoth you just killed, and say, ‘Yep. That’ll be nice for breakfast tomorrow.’

For our Stone Age ancestors, 15 was as good as it got. At 15, you were like an old person. You hunted and gathered, and if you were lucky, you got to reproduce, and then you either died, or something ate you. You didn’t need to plan for the future.

Our brains were super-tuned on getting through this moment, find something to eat, and not get eaten. And that’s been it for most of the past 70,000 years.

Planning and thinking takes energy, and our brains want to save energy.

So you are going against human nature when you try to come up with a plan for your money.

To our brains, saving also feels a lot like losing something – a big deal in evolutionary terms.

If you had just killed an animal, and were about to eat it, and some lions came along, that’s a big deal.

It’s not such a big deal now because the consequences are less dire, but our brains still go to that state of ‘‘Oh, damn it, I’ve just lost something. Now I’m going to die.’’

When we save, even though our pre-frontal cortex knows we have not lost that money, those other parts of our brain feel loss.

How do you turn that feeling of loss into something which feels nice?

You have got to ‘‘concretise’’ stuff, and make it real, and you have got to choose stuff to save for that is important to you.

If you just feel you have to save but don’t really know why, or what for, then you are not really that committed.

The more accurately you picture the thing you are saving for, the more likely you are to save that money.

I recently interviewed Retirement Commissioner Diane Maxwell for another series.

She said don’t think about saving as the cup of coffee you are missing out on now. Think of it as buying future you a cup of coffee.

Why wouldn’t I want to do that?

So, choose a goal you can get excited about.

The more accurately you picture what you are saving for, the more likely you are to save that money.

Once again, it’s about bringing your frontal cortex, the thinking parts of your brain, into play.

But as your brain is fundamentally lazy, and is always trying to save energy by not thinking, you need to make it as easy as possible to save.

One of the simplest, most important lessons of the whole Mind over Money series is the importance of friction.

You have to have as little friction possible between you and the things that are better for you, like saving.