LESSON 1

MONEY AND EMOTIONS DON’T MIX

We are programmed to follow our emotions, says Dan. It’s nature’s safety mechanism to make sure we respond appropriately in dangerous situations. ‘Imagine,’ he says, ‘that you see a tiger in a forest. Nature doesn’t want people to start thinking about cost and benefit; nature wants us to just start running.’

Following your emotions can make for impulsive spending. Adverts on television, salespeople in shops and algorithms used by social media are all too happy to exploit. How often have you browsed online for something, only to find an advert for it in your browser the next day? How often have you been so caught up in the rush to buy at the sales that you ended up with stuff you didn’t need?

REWIRE!

◆ Instead of buying something immediately (online or in-store), walk away and see if you still want it in half an hour. The bigger the purchase, the longer you need to let that fizz of emotion settle.

◆ Look at your bank statement every month for evidence of emotional spending. Are you, for instance, buying clothes online in the evening when you’re bored?

◆ Use apps like Yolt to track spending so you can see where your money goes. It even provides breakdowns of how much you spend in a store, and in categories like travel or eating out.

◆ Once you’ve identified your bad habits, put processes in place to break them: no online shopping to pass the time, or only buying lunch from Pret once a week.