The Science of Making Better Spending Habits

Yes you can make better spending habits. Here's how to make a systematic plan to increase your odds of success, with tips from the latest science of the brain.

Breaking a bad habit isn’t easy. Whether it’s biting your fingernails or late-night shopping on Amazon, your good intentions need to be backed up by a systematic plan if you want to increase your odds of success.

The same is true of bad spending habits. Here’s why they’re so hard to kick and how you can set yourself up for better odds of success.

Is it Possible to Break Bad Spending Habits?

5 whys of spending

When you’re tempted to purchase all the things, a part of your brain called your nucleus accumbens lights up. This part of your brain releases positive arousal signals, and plays a large role in reinforcing various addictions.

If you have a shopping addiction, your nucleus accumbens may make you feel great even while you’re practicing spending habits that you know will mess up your budget.

The part of your brain that stops you from making the purchase, the insula, uses negative arousal signals to do so.

Yes, maybe you really want that video game, but you also know that it’s going to be hard to make rent if you make the purchase. 

That would be your insula talking.

The thing is, the signals sent off by the insula are protective, but they don’t offer your brain the same reward as the signals sent by the nucleus accumbens.

You may have stopped yourself from making a bad money decision, but without the reinforcement of a biological reward, the urges your nucleus accumbens tells you to follow feel more exhilarating, bringing you back to your bad spending habits over and over again.

Recognize Triggers to Curb Your Spending Habits


We use the word “trigger” much too freely these days, but in the realm of addiction it’s an appropriate and useful term.

When you encounter a spending trigger, your nucleus accumbens starts encouraging you to pursue those positive arousal signals by making a purchase.

Knowing your triggers can help you recognize what’s happening, and help adjust your behavior. Your spending triggers may include:

  • Rewarding yourself after a rough day.
  • Boredom.
  • Competition with your peers to maintain your image.
  • Social media advertising.
  • Buying gifts in an attempt to buy love.

Build Your Own Environmental Supports 

When we talked to Gregory Samanez-Larkin, Assistant Professor of Psychology and Neuroscience at Duke University, he suggested that one of the most effective ways to combat bad spending habits was to set up structural or environmental supports.

One such example is the little box on your credit card statement that tells you how long it would take you to pay off your debt if you continue making minimal payments only versus how long it would take you to pay off your debt if you made a larger payment every month.

Because we don’t currently live in an environment where regulations and requirements of financial institutions are likely to get stricter, you may have to create your own environmental supports.

That box on your credit card statement is there, but you’re not likely to get much else from the top.

Let’s say you know boredom is one of your spending triggers.

You could make a list of things you enjoy doing. Stick it on your fridge, mirror or somewhere else where it’s easily accessible.

The next time boredom tempts you to make a poor purchasing decision, check out your list first.

Because it’s made up of activities you find enjoyable, pursuing one of them is likely to satisfy your nucleus accumbens, giving you those positive arousal signals without you having to whip out your credit card.

Replacing Bad Spending Habits with Good Saving Habits

Ultimately, that’s what replacing bad spending habits comes down to: Preparing ahead of time to combat the arousal signals going off in your brain.

Simply listening to those negative arousal signals from your insula isn’t enough, though. You need to create some sort of reward for your brain for doing the right thing, much as the list you used as an environmental support provided pleasure rather than denial.

One of the most effective ways to do this is to establish and reward good saving habits.

While those with bad spending habits get a rush when they do something fiscally destructive, those with good saving habits often get a rush out of doing the right thing with their money. 

While the insula serve to warn you against a potentially bad financial decision, your nucleus accumbens can send off positive signals when you do things like stash money in your savings account or score a great deal. 

If you do have a problem with your spending habits, be careful that you don’t spend money simply because there is a great deal being offered. However, if the deal is on something you’ve been saving for and waiting to purchase, you are likely to get a mental reward when your score all that savings.

While it might not feel immediately gratifying to open your savings account with a small amount like $20, putting money away can actually stimulate your nucleus accumbens—especially as your balance grows.

As environmental supports, you can ask for a receipt with your total account balance every time you make a deposit. You could also create a progress chart either online or by hand with pen and paper.

As you watch yourself get closer and closer to your savings goal, your financial self-confidence will grow, and you should start feeling the positive arousal signals associated with higher savings account balances.

If you reward rather than punish yourself, you could replace your bad spending habits with positive saving habits and all the opportunity that comes with them. 

Brynne Conroy

Brynne Conroy

Motivation for women in business & on the homefront. Smart money management for success & true wealth. Author of The Feminist Financial Handbook.

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