It’s my money and I’m afraid to lose it

By Hilary VizelA girl looks at a screen showing an almost sold out concert

Imagine you pull an old coat out of the closet and find a $20 bill in the pocket. You might think, “Great! I’ll spend it on beer tonight.” Now imagine your disappointment when you get to the bar and learn there was a hole in that pocket and the $20 is long gone. Total bummer. And one that psychologists have a ready explanation for: Loss Aversion. Once we have something in our hot little hands, our brains work hard to ensure we avoid the pain of losing it. In fact, the mental discomfort we feel can lead us to some less-than-rational conclusions. In one classic study, a university professor passed out inexpensive screen-printed mugs to a portion of the students in his class. At the end of the class he took a poll: How much would they be willing to sell them for? About $6. And how much would the non–mug holders be willing to pay? Just $4. Because the mug-owners had to live with the loss of their mugs — which they'd unknowingly developed an instant attachment to — they felt they were worth more than the mug-less students did. Back to that $20 in your pocket: Any frustration you feel at the loss is larger than the joy you get from the initial discovery. Again, total bummer.

Use this knowledge If you are shopping for concert tickets and you notice a countdown warning that the tickets will be released if you don't complete the transaction, don't panic. It's a sales tactic used to trigger your sense of Loss Aversion. But remember that you would also like to avoid losing your hard-earned dough on a so-so event. Make sure you’re committed to the show before you get to the scare tactics.

Make saving as easy as spending

Set a goal and make it happen.