Sydney, Dec 21 (IANS)

Did you ever stop and think why, despite putting aside a sum of money to enhance personal savings every month, your bank balance stares jokingly at you?

Because you are thinking linear and don't posses a cyclical mind.

A cyclical mindset than the typical linear, goal-approach mindset, encourages people to think of life as a series of interconnected recurring experiences thus boosting their chances of having great short-term savings.

Thinking about time as a cycle of recurring experiences may help us to put more money away into our savings, according to new research.

"We believe in the importance of having an emergency fund, back-up savings, or simply 'money in the bank' - and yet, savings rates are still low," said psychological scientist Leona Tam of the University of Wollongong in New South Wales, Australia.

"Our research suggests a new, alternative method to personal savings that we hope will help to bridge this gap," said Tam.

Tam and colleague Utpal Dholakia of Rice University hypothesised that the conventional wisdom for saving money -- orienting toward the future and striving to reach savings goals -- may not be the most effective tactic because it leads people to create abstract goals instead of clear plans about how to put the money away.

A cyclical mindset, on the other hand, encourages people to think of life as a series of interconnected recurring experiences. The researchers found that a cyclical mindset should make people less likely to defer saving money by boosting their ability to make concrete plans and decreasing overly optimistic thinking about the future.

With 157 participants, the researchers found that participants who were focused on achieving goals so that the future will be easier projected they would save less money in the next month than those who read about a cyclical method, focused on making routines and habits now to repeat over time.

But did this translate to real-life savings?

The researchers had a second study with 145 participants. Participants who were prompted with a linear mindset and those who received no savings instructions saved, on average, Rs.8,000-8,500 after two weeks.

In contrast, participants with the cyclical mindset saved about Rs.14,000 - 82 percent more.

People in the cyclical mindset group were able to save more, at least in part, because they developed more concrete plans and were less optimistic about future money-making in comparison to their linear-thinking counterparts.

It is time that the financial advisers and institutions incorporate the cyclical method in designing savings programmes, said the researchers.

The findings were published in Psychological Science.