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

November 16, 2020

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.

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.

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.