Little financial missteps can add up to a lot of loot lost over time. And that’s not okay. So understand how your brain works when it comes to spending – because the battle between spending and saving is a neurological showdown. Make sure the correct side wins.

Striatum
When you see something desirable (be it a pair of designer shoes on sale or a new investment opportunity), this section of the brain releases the feel-good chemical dopamine, which acts like a drug and spurs you to pursue reward. “It’s the wanting system,” says Dr Paul Zak, director of the Centre for Neuroeconomics Studies at California’s Claremont Graduate University.

Anterior Insula
As the striatum has you pulling out your credit card, this pinky-tip-size part of the brain holds up its hand and says “Wait, do we really need this?” The insula is where we get our aversion to risk, and it communicates with the rest of the body through feelings of nausea and discomfort – which could explain that queasy feeling you now get when you open your bank statement. (Cool factoid: Women’s anterior insulas are naturally more sensitive than men’s, which may be why we carry more insurance and choose less-risky investments than they do.)

Prefrontal Cortex
This part of your noggin referees the battle between the covetous striatum and the conservative anterior insula. You can help out the gray-matter middleman by doing the following:

Establish Limits
Before you go crazy with the plastic, pledge that you’ll never spend beyond a certain amount (say, R500 for a pair of shoes). “Just like Vegas, you put a cap on what you’re going to gamble before you get to the table,” Zak says.

Wait a Day or Two
Still want those heels? Put down the credit card and move away from the cash register... slowly. In the heat of the moment, the cortex might defer to the section of the brain that’s got the fastest trigger finger, not the one with the most sense. But the more time you have to really mull over a purchase, the more time the cortex has to weigh the pluses and minuses. So wait at least 24 hours before handing over the cash.