Science has revealed why you keep overspending - and it’s not what you think

Your brain wasn’t built for budgeting

Human brains are wired for short-term rewards. That means we’re more likely to spend £30 on dinner tonight than save it for a vague future goal like buying a house in five years. Blame something called present bias — a cognitive bias that makes immediate gratification feel more valuable than long-term benefits.

Even when we want to save, our brains don’t always cooperate. This doesn’t mean you’re bad with money. It just makes you human.

Contactless payments make things worse

Psychologists call it payment decoupling or the cashless effect - the idea that when we don’t physically hand over money, it doesn’t feel like spending. Credit cards, contactless payments, subscriptions, and one-click checkouts make it all too easy to disconnect from what’s leaving your account. And when you’re not actively thinking about each purchase, overspending becomes the default.

Lifestyle inflation sneaks up on you

As your income increases, your spending often does too. Not because you need new things or experiences, but because you have the ability to spend more freely. This is known as lifestyle creep, or lifestyle inflation, and it’s one of the main reasons people struggle to build savings, even when they earn more than they used to.

Lifestyle creep happens slowly: a slightly nicer car, pricier holidays, takeaway twice a month instead of once. It doesn’t feel like a big deal, but over time, it can eat away at your ability to save for major goals such as a deposit or retirement.

Social comparison is everywhere

Through social media, we’re constantly being shown how other people live - or at least how they appear to live. That can lead to subtle pressure to match the lifestyle of friends, influencers, or colleagues, even if their financial situation is completely different.

This is part of what behavioural economists call anchoring — we judge what’s ‘normal’ or ‘reasonable’ by what we see around us, which makes spending more feel like the default.

Perfect for you: How to set and reach your savings goals

So… how do you stop overspending?

You don’t need a spreadsheet and a strict no-spend challenge (unless that works for you). Instead, try building small, friction-reducing habits that make it harder to spend and easier to save:

• Set up a standing order to move money into savings the day you get paid.
• Use separate accounts for spending and saving so your future funds aren’t mixed in with your everyday cash.
• Track your spending for a week or two to spot where money slips away without you realising.

Learn more: How much should actually be saving each month

You might also like: Our essential guide on how to actually save money

Overspending isn’t a moral failure. It’s a design problem.

Your brain, your environment, and your tools all play a role in how you manage money. The key is to create a system that works with your habits, not against them. That’s why at Tembo, we use behavioural science to help you save for big life milestones like a house faster. For example, our Time To Save feature shows you exactly how long (or how little) it’ll take you to buy your dream home based on your progress so far.