Saving and the 'money illusion'

People who start making a concerted effort to save money are likely to find that the practice becomes habitual. Speaking to the Daily Mail, Kim Stephenson noted that individuals who consistently place cash to one side start to do so as a matter of course.

The Chartered Psychologist explained that people who get into this routine learn to defer gratification and can therefore afford what they want in life - such as educating their children.

He noted there exists a term in psychology known as the 'money illusion', which means: "We're not good at recognising how small savings in early years end up being worth a lot more than big savings later on, because of inflation and compound interest."

Mr Stephenson recently advised adults in Britain to start prioritising their finances before they accumulate mountainous debt, especially with childcare costs using up a considerable portion of family resources.