Save for a brainy day
The ability to save money is determined by the side of the brain you think with, it was revealed this week. New research commissioned by first direct found those who gave right-side of the brain responses (typically creative and impulsive types), have a carefree 'live for today' attitude, credit card debts and little or no savings.
But deeper thinkers, who responded using the left-side of the brain – careful and logical types – are far more comfortable managing their finances, it emerged.
The study was carried out at Hertfordshire University by psychologist and author of Sheconomics, Professor Karen Pine.
Professor Pine began the experiment by asking 500 adults a brain-teaser compiled by US-based scientists.
She examined their answers and found that only one in three people got the answer right; these people were 'reflectors' - who think with the left-side of the brain.
Most of the people got the question wrong; these were 'intuitors', people who tend to use the right-side of the brain.
When participants who gave the wrong answer were asked about their money, it was found they had fewer savings, credit card debt and a lax attitude to money management.
Professor Pine, said: ''Reactive people can't suppress the first answer that springs to mind. They're the kind of people who live for the moment and avoid putting effort into anything that doesn't bring short-term gain. This can be linked to poor money management, such as only making the minimum repayment on a credit card.
''Intuitors might feel dissatisfied with their bank, too, but don't change it.
''This is irrational given how much choice there is now and the cash incentives for switching. For instance, customers moving to a first direct account will receive £100 for switching, but if they’re not completely satisfied they can choose to leave the bank and receive a further £100 for their trouble.''
The following question was used to kick-start the study:
A notepad and pen together cost £1.10.
The notepad costs £1.00 more than the pen.
How much does the pen cost?
The results showed 64 per cent of people got the answer wrong, with most opting for 10p.
The answer is in fact 5p because the notepad costs £1.00 more than the pen. So the notepad costs £1.05 and the pen 5p, together they cost £1.10.
People who gave the right answer are 'reflectors'. They use careful, logical thinking; a style linked to left-brain processes.
The report of the study also showed 43 per cent of 'intuitors' had been with the same bank since leaving school. For some this was 30 years ago or longer.
Jason Sharpe, Customer Service and Sales Director at first direct, commented:
“With interest rates at a record low for over a year now, it’s more important than ever for people to stay on top of their finances and ensure that they are with a provider that will deliver the best service and financial return for their individual circumstances.
“The study revealed that almost one in four 'reflectors' had changed where they bank at least twice, while 43 per cent of 'intuitors' had never changed bank. first direct offers a satisfaction guarantee, so customers can be rest assured that they’ll receive a quality service if they switch.
“However, if for whatever reason they’re not completely satisfied, they can choose to leave the bank and receive a further £100 for their trouble. So, regardless of whether they’re a ‘lefty’ or a ‘righty’, people can switch with confidence to first direct.”
It also emerged that 66 per cent of 'reflectors' pay off their credit card in full every month, compared to just 43 per cent of 'intuitors'.
Twice as many 'intuitors' than 'reflectors' pay off only the minimum on their credit cards and 87 per cent of 'reflectors' have money in savings compared to 70 per cent of 'intuitors'.