bahrainthismonth.com | MARCH 2025 COMMERCE 50 Financial Wellbeing Behavioural finance is a fascinating subject that highlights the many cultural, social, psychological and cognitive factors that determine how we interact with money. While knowing your fundamental relationship with money may not change a lot initially, it will allow you to notice your patterns. Eventually, you will figure out why you do what you do and if you want to change it. One of the first things one might notice in patterns in whether they are, at the core, spenders, savers or somewhere in between. To understand this, let’s try and unpack what makes people spend or save in the first place. Some people find it very difficult to spend money. They hold on to the last penny, hunt up deals and if they can avoid an expense, they will. The joy of money in their bank has a very high weight and so to spend happily, the joy of the purchase must be significantly higher. On the other hand, there are people for whom spending is the joy, and savings could be negligible, or a by-product of a life lived and money spent. Business Consultant Pria Masson shares insights on understanding the dynamics of spending versus saving, highlighting the psychological and emotional factors influencing financial decisions. She explains how recognising personal patterns can lead to guilt-free, mindful financial habits and long-term wellbeing. Understand spending versus savings We live in a consumer economy which means early on, so many of us are conditioned to equate success and happiness with the tangible products (houses, cars, clothes) and services (schools, holidays, etc.) that are available. Hence, when we can instantly get access to these, the dopamine centres in our brain possibly light up and we feel like we achieved something. This reinforces a mindset where money becomes both a means to an end and a goal in itself. It motivates us on so many levels and can soothe (and trigger) multiple psychological elements. At the first level, spending brings instant gratification. The loop from ‘I want’ to ‘It’s mine’ is closed quite swiftly and neatly. For many, it also soothes an emotional need in a manner similar to food. So, having a bad day, here is an easy fix – go buy something and the dopamine will lift your mood for the moment – and it can be a loop.
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