3 reasons why the money problems arise even smart people

• On the day of the salary you see a large amount on a map and think that now you can buy everything. Because of this, a lot of money is spent on nonsense, and by the end of the month have to save.
• You agree to receive less for their work, but right now than for some time to wait for more pay.
• Do you feel sorry for money for a major purchase, but you easily spend on a lot of small.

Faced with something like that? Most likely, yes, it's common cognitive distortions.

1. We become victims of money illusion

We forget that the ability to buy something depends not only on the numbers we have in the account, but also on the price fluctuations. If you have raised salary, It does not mean that you have become richer. After all, because of inflation the prices of goods also increased. This is theOvercoming money illusion: the numerical ability of individuals and the role of emotion. money illusion.

We do not take into account the real value of money.

It seems that they are always the same, but their value is constantly changing. At the same amount at different times, you can buy a different amount of goods.

This phenomenon first began in 1928. Economist Irving Fisher (Irving Fisher) describes it as "a failure to understand that the value of the dollar or any other currency that increases, then decreases." It even affects our satisfaction with his position. In 1997, behavioral psychologists have confirmedMoney Illusion. it is in the course of experiments.

They described the participants of such a situation: there are two people, they have the same education, position and starting salary. The difference in how they raised wages in the second year jobs and what percentage of inflation where they live.

• First: Salary 30,000, inflation of 0%, an increase of 2%.
• Second: Salary 30,000, inflation of 4%, an increase of 5%.

Three groups of participants were asked to answer one of the questions: whose position economically advantageous of these people are happier and whose position more attractive. In terms of real income, more favorable provisions of the first. After deducting inflation, his salary is more than the second. Majority and they responded when asked about economic benefits.

But the question of happiness respond differently - said that the Second happier. It manifests itself as money illusion. People think that the higher gain means more money, and, therefore, more happiness. It also leads to the conclusion that the position of the Second attractive.

This proves that we are still able to take into account the real value of money when we are reminded about inflation. But under normal circumstances, we forget about it and judge the money properly. We think that we have more of them than they actually are, and make rash purchases.

How to fight it

When taking financial decisions, try to think rationally. Do not give in to emotions. Remind yourself about inflation and the real value of money.

In order not to squander the salary at the beginning of the month, start lead budget. Calculate how much you spent on food, utilities, medicine, and entertainment. Plan other purchases, focusing on the free balance.

2. We are affected by the hyperbolic depreciation

Suppose you are asked to get 3 000 today or six thousand a year. The majority in this case would have chosen 3000 at once. We prefer that the award, which can be obtained first. Even if it is less than that which awaits us later. Future reward is not so important for us, we depreciateA Discounting Framework for Choice With Delayed and Probabilistic Rewards.

But if you put the question a little differently: 3000 rubles in nine years or 6000 10 - people are more inclined to the second option. When waiting for a reward is still long, we think rationally and choose a large sum. But to make the right choices in the short term difficult for us. This explains the credit card debt. Financial stability does not seem so valuable in the future as an opportunity to buy something nice now.

This cognitive bias affects not only finance, but in general everything that is connected with self-control. depending onImpulsive and self-control choices in opioid-dependent patients and non-drug-using control patients: Drug and monetary rewards., Eating habits, those areas in which you need to give up immediate pleasure for the sake of future prosperity.

For example, you are overweight. You understand that to lose weight you need to move more and balanced diet. You swears does not succumb to the temptation for the sake of the health in the future. But then you can not resist the chocolate cake for dessert.

Compared with the immediate pleasure of a cake health in the distant future it does not seem so valuable.

Some scientists explain this by means of evolutionThe Evolutionary Foundation of Probability Weighting and Hyperbolic Discounting.. When your distant ancestor saw little weedy antelope, he tried to catch and eat it, rather than waiting for larger production. Because up to that point could not survive. As a result, I developed a mechanism in the brainShort-term reward experience biases inference despite dissociable neural correlates.That encourages immediate gratification.

How to fight it

Advance protect yourself from temptation. In order not to spend on immediate pleasure, set the limit for the card costs. Automate accumulation. Be accountable to someone about their spending.

Before you decide, imagine yourself in the future: whether to approve "future you" this choice. So you will appreciate the objective facts.

3. We are exposed to the effect of the denomination

Often: splurge on a big purchase we are afraid, but much smaller - no. The blame for this effect denomination or another denomination effect. Large denominations seem to us more valuableA partitioning explanation of the denomination effect., Sorry for them to exchange. We mentally consider them "real" money. A smaller denomination coins and dignity are not as valuable, easy to them for us to part.

Surely you have experienced similar feelings, holding a five thousand dollar bill. She did not want to spend. But the same amount in denominations of 1000, 500 and 100 rubles you mentally will carry into the category of everyday expenses and quickly to spend.

Scientists have described this effect in 2009, conducted a series of experimentsThe Denomination Effect.. In one, they asked people to pass a short survey, and as a reward gave them five dollars. Someone one bill, and someone five bills in denominations of one dollar. After that, participants can go to the store and spend obtained. The researchers then asked to see their checks. It turned out that people who have received a five-dollar bill, largely refrained from spending.

This effect affects all people, but especially severe in countries where often pay in cash.

Researchers described an experiment in China. 20% of Chinese women have decided not to spend the received bill of 100 yuan (at the time of the experiment it was quite a lot). But among those who were given the same amount of money small denominations, refrained from buying only 9.3%.

In effect, the denomination has one more manifestationPennies-a-Day: The Effect of Temporal Reframing on Transaction Evaluation.. Purchase seems profitable, if the price is not in one lump sum, and is distributed by days or months. It is easier to pay for the service "10 rubles a day" rather than "3650 rubles" in a year.

How to fight it

If you want to save, do not carry a lot of small money. To part with large bills psychologically difficult, even if we know that we obtain from it the change. Use it as a protection mechanism from unnecessary spending.

Remind yourself that in the end spent little things add up to a large sum. For clarity, please create financial diaryWhich will celebrate the costs.