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Money hack: temptation bundling.

Money hack: temptation bundling.

Bundle the stuff you like to do with the stuff you know you need to do. This small behavioural trick is almost like paying yourself for your vices.

28 August 2018 · 4 min read


  • Blend 'wants' with 'shoulds';
  • Look at entertainment, shopping, eating out;
  • Put your savings somewhere clever.

When it comes to saving, every little bit counts - from the 20 cent pieces you may throw in your change jar at the end of each day, to the $100 you might automatically transfer into your savings account every time you get paid.

But what if you’re in need of a new savings strategy to really motivate you to put even more money away? Well chances are you’ve heard of savings strategies like the 52 week challenge or the 50/20/30 rule, but what about temptation bundling?

Conceived by Professor Katherine Milkman of the University of Pennsylvania, temptation bundling is an idea that involves pairing a ‘want’ (like reading your favourite book) with a ‘should’ (like getting your daily exercise).

It’s basically a disciplined trade off whereby you can only do something you love when you also do something you really should be doing. Pairing your vices with your desire to save

Temptation: Entertainment

Whether it’s binging on Netflix, going to the movies, or gaming with friends, everyone has an entertainment vice. But if you’re on a money saving mission, temptation bundling could be the solution to easing your guilt about the time (and money) you spend on your favourite activities.

Let’s say you spend a pretty conservative two hours a day gaming or watching TV. Committing to putting aside just $2 for every hour you watch or play would add up to an impressive $728 over the course of a year! Not bad, hey?

Temptation: Shopping

Love browsing through clothes and books online during your lunch breaks? Chances are the cost of that love for shopping might be adding up, but temptation bundling could allow you to indulge your shopping wants while satisfying your need to save money at the same time.

One way to bundle the two is by ‘price matching’.

For example, every time you buy clothes or a new book, you simply match that same amount and put it towards your savings. While the knowledge that you have to match your spend could end up cutting the amount of purchases you actually make, say you shell out $120 a month, that would still work out at $1,440 a year saved!

Temptation: Eating Out

Can’t survive without your morning takeaway coffee? What about that Saturday brunch with friends? Eating out is a pleasure many of us wouldn’t want to trade for the world, but by using your love of food as an opportunity to save, you won’t have to.

One way you can eat out without the rumblings of spending regret hitting your stomach is by ‘tipping’ yourself. Tipping might not be a custom in Australia, but that doesn’t mean you can’t make a habit of assigning 15% of any bill you get when eating out towards your savings.

Even if it’s just $2 at a time, if you’re a regular foodie that could easily add up to $10-$15 a week or well over $500 a year.

I’m ready to bundle, but where do I stash my savings?

Choosing the right place to park the cash you save really depends on your goals and the timeframe you need to achieve them. But whatever they are, there’s no use in squirreling your money away in a jar on your shelf and maybe depositing it into a bank account just won't help you achieve your financial goals.

(Read this post on why cash costs you money, if you'd like to know why.)

After all, you want a return on that money you’ve been working hard to save, right?

For many of us, short term goals such as buying a new pair of boots or going on a weekend getaway is where our focus tends to lie.

And given that these goals won’t take long to achieve, it may make sense to stash the funds you’re saving through temptation bundling into a high interest savings account which couples easy withdrawal access with a decent ongoing interest rate.

Or maybe, you could think about investing your money in the share market (which is more risky than depositing it into a savings account, but may also have a greater potential upside - though its not guaranteed).

At Spaceship, making your first investment is as easy as downloading the app, entering in your details, choosing your fund and deciding on the amount you’d like to invest (one-off or on a regular basis).

But what about long term goals?

From owning your first home to having a more comfortable retirement (or even retiring early), most of us have long term goals we’re trying to put money away for, but these can be easy to neglect in favour of instant gratification and short term purchases.

But given that you’re already disciplined enough to want to save in the first place, it makes sense to portion out some of the savings you make through temptation bundling towards your long term goals as well.

Once again, the best place to stash your funds in order to achieve these goals really depends on your timeframe, the return you want and how much risk you're happy to take.

If you’re looking to patiently invest over a period of years it may be worth considering an investment option like Spaceship Voyager, whereas if your eyes are firmly fixed decades away on an early retirement, contributing more to your superannuation could be the best way to make it happen.


AUTHOR: A money writer at financial comparison website, Tom Watson is a serial saver who regularly puts new savings strategies to the test so that he can maintain his own Pad Thai addiction and devotion to Westworld, while also helping other young Australians save money and improve their finances.

The information in this article is prepared by Spaceship Capital Limited (ABN 67 621 011 649, AFSL 501605). It is general in nature as it has been prepared without taking account of your objectives, financial situation or needs.

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