Ed McKnight: Science-backed saving tips - Saturday Morning with Jack Tame

Struggling to save money? Ed McKnight has a few tips that are backed by science that should help with your finances. 

Mental accounting

Having rules of thumb (like 50% of spending to needs, 30% to wants and 20% to savings) actually works. 

It also helps people save more, especially if you are using different bank accounts (e.g. a needs account. A wants account. A savings account). 

Big goals vs small goals

People save 82% more if you say "I'll just focus on savings $100 a week." Rather than "I want to save $5k". 

The Save More Tomorrow approach   

This method takes half of an employee's pay increase and adds it to a savings account, repeating every time they get a pay rise.  

During this study people went from saving 3.5% of their pay to 13.6%. 

LISTEN ABOVE

See omnystudio.com/listener for privacy information.