Saving money is painful. Penny-pinching is extremely difficult for all of us and you are no exception.
That is why I feel compassion for all the people who truly want to save money, but are not able to put a single dollar aside because of, for example, they are being stuck working for low salaries. Theoretically, the bigger the paycheck, the bigger the amount you could possibly save for the future.
But, remember, no matter how much you earn, you have a 50% chance to succeed.
In my opinion, in order to be a successful saver, it highly depends on two factors: basic financial knowledge and full commitment.
Why is saving money so hard?
Let’s think about a few potential reasons which stop you from implementing good saving habits into your daily life. Take your time. List at least three reasons whichever comes first to your mind (…).
Here are a few of my own ideas:
1. Saving money is difficult because it takes time.
Nowadays, we live in the state of the 24-hour news cycle. When Asians are falling asleep, Europeans are having lunch and Americans are working at full steam.
We are surrounded by constant information bombing our heads from different directions: TV sets, smart phones, the Internet, etc. The constant urge to access more and more information, mixed with a dose of modern consumptionism, is jumping out on us from various communication devices, making us running from purchasing one thing to purchasing another within minutes. As a result, many people do not want to wait until they can actually afford to buy something with cash. They want the new version of something cool, and they want it immediately.
Saving money sucks for many because it requires us to stop for a while to evaluate what you do need and do not need in your life.
It takes time to learn how to start saving.
It takes time to make a saving plan.
It takes time to track records how much you have already saved this month, and how much you still need to save to reach your saving goals.
And, it takes time to change old money-saving habits.
None of the above is easy.
2. Saving money is difficult because it is people’s nature not to save.
Some people have a natural ability to save money. They have got a ‘saving gene’ inside their brains. Being thrifty comes extremely easy for them. It is the same with happiness – some people are just more happy than other people because of biochemistry of their bodies.
I am one of those people who save naturally. The problem is that only a small percentage of people in the entire population have that saving gene. And for the rest, spending money is much more fun. And people want to have fun.
People also want to feel rich, so that every time when making a new purchase, they can buy the feeling of richness. But that feeling of feeling that you have a lot of something you can touch (gained through buying) is only a quick illusion. Because spending money unreasonably actually makes people poorer.
3. Saving money is difficult because people tend to focus on urgent desires rather than future priorities.
A cup of hot coffee from a coffee shop would be the perfect way to start a new day. So, does a delicious breakfast from a nice French restaurant/bakery nearby. Both ideas sound great. However, buying expensive cup of coffee every morning obviously does not make you better off financially. It makes the shareholders (owners) of that coffee shop and that bakery richer, not you.
Think about it.
One day, when you get older, you might be unwilling or unable to work. That is why, before making urgent spending on things you ‘want so badly’ today, consider how much today’s decisions will cost you in the future. If you drink a cup of coffee that costs you USD$5 every day, you are going to spend roughly USD$1,825 a year and USD$18,250 over the next 10 years. And, it this is just spending on that morning coffee you love so much.
Think of what you will really want in the future rather than thinking of what you may want right now. You not necessarily need to be an extreme cheapskate not to drink coffee at all for 10 years. Get one cup from time to time to practice modesty, or prepare your own coffee at home. It costs no more than USD$1 to brew a cup of coffee at home.
4. Saving money is difficult because you need basic financial knowledge, skills and experience.
The more financial knowledge and experience you have, the easier it will be to save because you will know the basics.
However, the only way how to learn about personal finance when you are a child or a teenager is either from your parents, school, or other sources like TV or books. While many parents try to promote different methods to educate their kids about saving money, for example, by giving them pocket money regularly, most parents suck as personal finance teachers. It is because they suck at financial literacy themselves.
Many parents are not very good at saving money either. Schools are always too busy teaching their pupils math or physics rather than educating what to responsibly do with pocket money, and kids prefer to watch cartoons or play soccer than reading financial books, obviously.
5. Saving money is difficult because changing money-saving habits takes a lot of repeated work.
Saving money is sometimes like learning to play a musical instrument.
First, you set a goal to save great amounts of money quickly. Second, you start practicing. Third, you get frustrated because your learning curve did not really work out the way you had anticipated. Discipline helps with saving because putting aside cash is about repeating what works. You do not have to reinvent the wheel. Just spend less than you earn. Repeat. Spend less than you earn. Repeat. Success!
Your discipline might be enforced on you by yourself when you have a saving gene, or forced by your life situation when you do not earn enough money to meet your ends. You can also enforce saving money through a workplace saving program – pay yourself first through automatic deductions from your paycheck, and cover all daily expenses from whatever is left.
6. Saving money is difficult because you focus on one big milestone instead of many small steps.
Do not give up, even if you fail at saving for the first time. Nothing is easy in life. People often say that many great inventors, like Leonardo Da Vinci, had failed hundreds of times before they finally achieved greatness that changed lives of millions of people around the world. Failing is a great part of success.
Take your time, analyze the previous saving mistakes, and learn from them to improve in the future. It is how you deal with failures that determines whether you will achieve success.
7. Saving money is difficult because you want to show off in front of your neighbors.
Do you really want to keep up with the Joneses? The urge of saving money only to fulfill your desires to show off in front of others that you are better off is quite silly. If you only want to save money just to prove something to others, you will deliberately fail.
In conclusions, saving money is all about you – getting to know yourself better, learning, practicing, cultivating money-saving habits. Everything you do when comes to saving, you should do for yourself and your family, nobody else. Period.
