We all know having a budget is a good idea but sitting down to write your expenses as a means of spending less and saving more is easier said than done. Everybody knows having a budget is a good idea.
While many people make and stick to a budget, there is still a sizable population out there that doesn’t. Researchers at Duke University have found out one easy way to cut down on your spending without ever using a calculator.
In the 2017 annual report of the Common Cents Lab; a department in Duke University’s, they announced a few fascinating findings from their research, one of which is the fact that there are a lot of things people regret spending money on.
For one study, the lab partnered with a mobile-banking app and they presented millennial-age users with their 40 most recent purchases, and asked them to rate how happy they were with the decision to spend that money.
The study analyzed 30,000 transactions in all. First, they found that the users rated expenses related to community, healthcare, rent and utilities, arts and entertainment, and education the highest. This the Researchers say has to do with self-preservation.
The users’ lowest ratings went to digital subscriptions, convenience-store buys, and purchases made at bars, coffee shops, restaurants, and fast-food joints.
The very lowest ratings went to bank fees, for obvious reasons. Asides the digital subscriptions, these lamentable expenses all have one thing in common: food. It should surprise no one that food and drink purchases bring us the least pleasure of all of our monthly expenses.
The researchers realized this, too, and figured out a way to fight it. Personal budgets are less appealing but the research isn’t conclusive on how effective they are at actually saving you money. “… from a research perspective, the jury is still out on the benefits of budgeting,” the report says, vindicating people that go without budgets.
“It is unclear how successful budgeting is at actually reducing expenses even in the short term, given the behavioral challenges associated with creating and adhering to a budget.”
The researchers wanted to find a better way and this led to them surveying more than 1,350 people and asking them to rate each of the following options on how confident they were that they could follow it and how much they thought they would save by using it.
If you want to save money, try limiting “spendy” activities instead of limiting the amount you spend. Digital subscriptions eating at your bank account? Limit yourself to the two you use the most. Online shopping bleeding you dry? Keep a list of things you actually need, then limit yourself to only buying the items on that list.
And if you regret how much you eat out and order delivery, simply decide how many times you’re allowed to dine out every week, and stick to it. Your bank account will thank you.