U of U Study: Easy way to save money
KANSAS CITY, Mo. — Saving money can be difficult. However, there is one proven way to help you save money, according to the University of Utah.
Markham Heid, writer for Men’s Health, reports that researchers at the University of Utah split 91 people into two groups and had them complete a series of computer-based spending tasks. One group had one account. The other group had multiple accounts with the same amount of money. Researchers told participants to spend wisely because a few would receive any leftover cash.
Researchers found that the group with just one account spent about 10 percent less than those who had multiple accounts. The findings were tested again in three separate experiments, which revealed similar findings.
According to Himanshu Mishra, Ph.D., an associate professor of marketing at Utah’s David Eccles School of Business, people are less likely to spend less money if they have one account because people are more aware of the dollar amount in their account. When money is spent, the dollar amount not only goes down in the account but also in their mind.
Having multiple accounts makes it more difficult to keep track of the exact balance, which can become “fuzzy.” When people have the exact dollar amount in their head, spending more is easily justifiable.
It’s the same notion financial guru Dave Ramsey teaches. When using cash, your more likely to spend less than if you use credit cards or even a debit card because you can physically see the money leaving your hand.