Saving is a very familiar concept to most of us, whether or not we have mastered this discipline. The reasoning behind it is simple, consume less in the present to have more to consume in the future. But bearing this idea of ‘delayed gratification’ in mind, it is no surprise that many people struggle to curb their appetites in the present, trying to secure an elusive future. In this piece, we discuss nine things that make saving a tough pill to swallow for many of us.
1. Saving requires sacrifice and might get in the way of present comforts; it is only possible when a practical mindset is adopted. People might be forced to compromise on things like location when looking for places of residence, opting to live in less expensive areas. Additionally, living expenses will have to be cut down to only include utilities and other basic needs. For example, it can become impractical to get take-out often or spend on expensive and trendy clothing.
1. Saving requires sacrifice and might get in the way of present comforts; it is only possible when a practical mindset is adopted. People might be forced to compromise on things like location when looking for places of residence, opting to live in less expensive areas. Additionally, living expenses will have to be cut down to only include utilities and other basic needs. For example, it can become impractical to get take-out often or spend on expensive and trendy clothing.
Asset acquisition will boil down to only those things that are necessary and affordable. For one, I imagine that a young person without any dependents might question whether or not it is practical to own a car.
2. It forces people to live within their means. One cannot be intent on saving and yet amass debt at the same time.
So, one has to overcome the temptation to borrow continually because they have exceeded their income. Planning efficiently for income becomes a requirement because people are not just trying to spend only what they have and no more, they have to spend less than their income to have some leftover which is then stored away.
3. Saving births the desire to invest, and the idea of investing is tiresome to some people. Once one begins to save, they quickly realize that it is not the most efficient way to secure their future. Since saving is essentially delaying gratification, one will have to keep themselves highly motivated to do it habitually.
So, one has to overcome the temptation to borrow continually because they have exceeded their income. Planning efficiently for income becomes a requirement because people are not just trying to spend only what they have and no more, they have to spend less than their income to have some leftover which is then stored away.
3. Saving births the desire to invest, and the idea of investing is tiresome to some people. Once one begins to save, they quickly realize that it is not the most efficient way to secure their future. Since saving is essentially delaying gratification, one will have to keep themselves highly motivated to do it habitually.
One must decide how to multiply their savings for a bigger pay off at the end of the day. If there are no prospects that can increase savings, people may tire of the strict lifestyle saving imposes and give up on the concept altogether.
4. Savings are not protected from emergencies. In fact, they are supposed to provide the solution; the common phrase, after all, is ‘saving for a rainy day’. It becomes discouraging then, to try and save towards a future goal when present demands keep getting in the way of that goal. And, this is how insurance becomes such an attractive concept. It enables people to focus on growing their wealth for the future while attending to any emergencies in the present. This is one reason why the poorest people in society find it hard to rise above their station, even when they try to save their income; they remain burdened by all the demands of the present that need to be addressed.
5. People try to save unrealistically; doing too much too fast. This approach is shortsighted and is bound to fail in the long run. It drains all the joy from life since people cannot enjoy themselves in the present. Naturally, people will push back against such overwhelming restrictions and return to their excessive spending. A choice they will despise, and then overcorrect; creating an unhealthy pattern of deprivation and then binging.
6. Most people, especially young adults, would rather not seriously contemplate the possibility of an uncertain future and prefer to live in their idealized version of it. However, to save effectively, one has to think realistically about the future no matter how difficult that is. There is no sure way to estimate what you need if you are saving for retirement, thinking on: how long you will live, what will be the state of your health in that time, and whatever other unforeseeable things may crop up. One must consider this process, though overwhelming to set clear saving goals.
7. People approach saving in the wrong way, saving after expenses and not before. Saving is often thought of as storing away leftover income, yet there will usually not be any leftover income, making saving seem like an unattainable ideal. Plan to deduct your savings right when you receive your income and not after you have spent it.
It is advisable to determine a constant manageable percentage to save regularly. Preferably, this process should be mechanized; where the money is automatically deducted from one account and placed in another account. This bypasses human beings’ very natural tendency to change their minds, especially when expenses run high for one reason or another.
8. People are uneducated about the most optimal savings opportunities and processes. They cannot then take advantage of the options to make saving more manageable and more rewarding. For example, as I had mentioned earlier, automating the process instead of relying on personal resolve will go a long way in helping you save more effectively.
Once saving goals are established, it becomes that much easier to choose the home for your money. For short term goals- savings accounts are ideal, for midterm goals- savings products or investments should be considered depending on your risk appetite, and for long term goals- shares, bonds or funds are the smartest ways to save your money.
9. It can be an isolating process, especially if no one else around you is doing it, and instead are overspending.
This dynamic is demoralizing and can break the resolve of the person saving. This is a reason Investment Clubs are increasingly popular; they offer the community as well as the opportunity for financial growth because everyone can come together around a shared interest.
It might be helpful as you try and save to remember that people who set money savings goals save faster than those who do not. So, if you really want to get that deposit for a home, save enough for a dream holiday, or finally start that business, name your goal, work out how much you can save each month and get started. Then sit back and watch your money start to grow.
Saving does not have to be such a daunting process though, since this is a journey that many of us are on, sharing helpful tips can go a long way in helping somebody else save better and with less difficulty.
This dynamic is demoralizing and can break the resolve of the person saving. This is a reason Investment Clubs are increasingly popular; they offer the community as well as the opportunity for financial growth because everyone can come together around a shared interest.
It might be helpful as you try and save to remember that people who set money savings goals save faster than those who do not. So, if you really want to get that deposit for a home, save enough for a dream holiday, or finally start that business, name your goal, work out how much you can save each month and get started. Then sit back and watch your money start to grow.
Saving does not have to be such a daunting process though, since this is a journey that many of us are on, sharing helpful tips can go a long way in helping somebody else save better and with less difficulty.
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Saving is a very familiar concept to most of us, whether or not we have mastered this discipline. The reasoning behind it is simple, consume less in the present to have more to consume in the future. But bearing this idea of ‘delayed gratification’ in mind, it is no surprise that many people struggle to […]
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Saving is a very familiar concept to most of us, whether or not we have mastered this discipline. The reasoning behind it is simple, consume less in the present to have more to consume in the future. But bearing this idea of ‘delayed gratification’ in mind, it is no surprise that many people struggle to […]
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