Do you spend instead of save? Here's why – and how you can change it

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Your feelings about money may drive how you spend and save, but luckily you can change your ways
Sharma started studying the psychology of money after the Financial Crisis, when she noticed that even millionaires sometimes felt they didn't save enough. She found that people don't base perceptions of their wealth on objective metrics, such as how much they make, but how they compare to their past states, desired finances and how they compare to peers.

There may be a simple reason why, and it boils down to how you feel about money, according to Eesha Sharma, an associate professor of business administration at Tuck School of Business at Dartmouth College, who studies financial behavior around consumer wellbeing and marketing.

It's a tale as old as time – you want to save money, but just can't resist an impulse purchase in the moment even though you know it's probably not a wise financial decision.

"When those feelings highlight an insufficiency of resources, you can feel financially worse off," said Sharma, adding that this leads to bad financial decisions, such as spending your entire paycheck on things to feel better in the short-term while neglecting long-term goals.

Luckily, this type of thinking is something that can be changed, according to Sharma. Here are her tips for improving your relationship with money and saving, as well as the pitfalls she says consumers should watch for.

1. Connect…
Carmen Reinicke
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