Money Savings Mastery: Choosing Needs Over Wants for Success

Money-Saving mastery

The difference between needs and wants is a telling factor in choosing financial freedom and resilience over a life of living month to month. A study led by Cornell University has shown how our brains prioritize needs for survival and wants.

The Neuroscience of Choosing Needs Over Wants

The study watched a male zebra finch, a social bird species, choose between quenching its thirst and pursuing a potential mate. In choosing the potential mate, the research shows how a dynamic brain makes quick decisions in favour of what’s needed over what’s wanted. To do this, the team used an engineered virus and sophisticated optical recording methods to watch dopamine in the male’s brain as it turned its attention away from water to courtship behaviour. This showed the dopamine system in his brain is flexible enough to shift its focus among conflicting demands of behaviour to survive and to reproduce.

Though this study was done with birds, carrying these results over to humans is easy. It’s dopamine. Humans use the same dopamine for needs over wants to decide on financial matters. However, unlike the zebra finch that’s using this system in the wild, humans can be swayed by environmental and external influences to sway in their dopamine reward structures.

Implications for Financial Decision-Making

This study has enormous implications for financial decision-making and wealth management. By delving into how our brains prioritize for competing needs, we can use similar principles to manage our finances. It is essential to understand the distinction between needs (the essentials for survival) and wants (the desirable but non-vital). This is so that we can construct a budget that is in-step with our financial objectives such as saving, investing, and retirement planning.

Applying Neuroscience to Financial Resilience

money-saving mastery

Behavioural Bias Awareness

Similar to how male zebra finches prioritize courtship over thirst due to dopamine level shifts. Interestingly, humans tend to adjust priorities based on immediate desires or social influences. Being aware of these biases can empower individuals to make sounder financial choices. For example, recognizing the temptation of instant gratification can help resist impulsive purchases and save for long-term goals.

Just as male zebra finches prioritize courtship over thirst due to dopamine level shifts, humans too might also adjust their priorities based on the desire for immediate gratification or social pressures. Recognizing these biases, we can empower individuals to make better financial decisions. For instance, by recognizing when the desire for instant gratification is kicking in, we may resist the urge to splurge on a new pair of shoes and save that cash instead for long-term financial security.

Goal-Oriented Budgeting

Setting specific financial goals can be a valuable way to differentiate between needs and wants. Just as the dopamine system shifts towards the most important goal, by delineating tangible financial priorities, people can better direct their spending and savings. By crafting a budget that reflects our goals, we can better direct our resources (and mitigate the push and pull of dopamine). This can be achieved by reducing the influence of external forces on our decision-making.

Long-term Planning

Neuroscience research suggests that people are wired to choose immediate rewards over future gains because of dopamine’s fluctuations. However, by recognizing this natural tendency, individuals can take steps to counteract the push of instant gratification towards long-term financial resilience. For example, creating automatic savings strategies or funnelling money into retirement accounts. These strategies may offset the natural urge to gratify now and help to cement future stability.

Money-saving mastery planning

Neuroscience provides important lessons for our decisions. By understanding how our brains work, we can develop strategies for our money that is consistent with our goals. This would be more effective then limiting them with our biases. Sharing concepts, like the ones above, with each other, not only means building financial resilience for yourself, but for your friends and family, too. Financial well-being is the result of an ongoing effort, during which we continuously support each other in learning new things.

Building Financial Resilience

Creating resilience in your finances starts with prioritizing needs and establishing a financial cushion. This buffer becomes the foundation of proactive financial management, enabling you to navigate unexpected challenges and achieve long-term security.

Understanding the psychology of money can lead to greater self-awareness and better relationships with ourselves and others. This ultimately results in greater financial well-being. By prioritizing knowledge over individual financial decisions, we can ultimately create a more secure future.

Building financial resilience means questioning our behaviours and considering all the knowledge available. Neuroscience and effective communication are two concepts that can change the direction of our relationships with money and our financial well-being. The more importance we place on them, the more we fortify our own financial literacy. This in turn facilitates us to make better choices.

The Role of Education in Financial Management

Evidently, educational platforms like The Academy for Professional Intelligence (TAPI)® play a critical part in enhancing financial literacy and decision-making. The Savvy Savings Blueprint course, for example, grants individuals the knowledge and techniques they need to make comprehensive decisions about their finances. A result of this knowledge is the application of behavioural and neurologic decisions in managing one’s wealth and retirement planning.

Investment in Knowledge

This Clemson University study helps to deepen our understanding of the dopamine systems that control various complicated behaviours. This study also provides an important analogy about financial management. In essence, choosing needs over wants will enhance our financial decision-making, thereby enhancing our freedom and resilience.

money saving mastery

Education is a foundational method to build the skills to understand and choose between wants and needs. The Academy for Professional Intelligence (TAPI)®, for one, offers programs such as the Savvy Savings Blueprint. This free course is rich with strategies and lessons to develop and apply for more prudent financial management. It is important to note that investment in one’s own development can lead to wider and more thoughtful determinations that also contribute to healthier financial decisions.

More importantly, combining these neuroscience insights with the right education, like a program such as the Savvy Savings Blueprint, can considerably re-establish how wealth and retirement planning can shape our future. This is so important because this simple shift in how we make decisions can make the difference between a secure financial future and decisions that are at best for us and identify those that are ill-informed. It is essential that we continuously learn and apply new insights and information. This application of knowledge allows us to create our own financial destiny. Ultimately this empowers us in owning our most basic path to thriving and not just surviving financially.

Surpass in Financial Management and Planning with Professional Intelligence®

The pursuit of mastery in financial management and planning is not just beneficial. It is in fact essential in securing your future in today’s fast-paced world. Professional Intelligence® is proud to be your trusted companion and leader along this journey of empowerment. Our collection of devotedly crafted classes, including our famed Savvy Savings Blueprint, are more than just lessons. They are your key to unlocking the door to financial enlightenment and independence. Through our classes, you will find the liberating power of on key strategies to saving money and building financial resilience. You’ll will be empowered to make strategic choices that take your wealth and retirement planning to the next level. Interact with the team at Professional Intelligence® and watch your financial dreams transform into reality. Sign up today!

Picture of Paul Kohli

Paul Kohli

Paul Kohli BSc FCA is a world-renowned Chartered Accountant qualifying with PricewaterhouseCoopers® earning the status of Registered Auditor. He is the Principal Executive Producer at The Academy for Professional Intelligence® (TAPI®), Chartered Accountants. TAPI® provides in-depth personal finance guidance through interactive courses, helping individuals become their own financial coach. It aims at the holistic development of emotional, social, financial, and physical intelligence, teaching effective money management and savings techniques for long term financial resilience and freedom. The content provided is for informational and guidance purposes only, and should not be interpreted as legal, tax, investment, financial, or other professional advice. It is not an endorsement, offer, or solicitation for any financial assets or securities. Information is of a general nature and not tailored to individual needs; readers should seek specific advice or conduct their own research before making decisions. The The Academy for Professional Intelligence® (TAPI®), Chartered Accountants does not guarantee the accuracy of the information and accepts no liability for any errors, omissions, or losses resulting from its use.

Get your Kickstart Blueprint (worth $47) for FREE on its official launch date on the 20th of February

Get your comprehensive snapshot of the holistic journey toward financial resilience.
Free spots are limited, so sign up now!