Why is it so hard to save money?
It's pretty hard for most people. I have a few theories. Instead, let me start with a dream I had once.
I distinctly remember being a bank teller. It's not a modern bank, but a bank from a Western movie. I'm wearing one of those old-fashioned armbands and a black visor. There are bars in front of the teller window.
There's a line of people in front of my window. They stretch outside the doors of the bank continuing down the street.
As every customer steps up, I just keep shoveling my own money to everybody that's in the bank line. I felt real anxiety as I looked down and my teller drawer emptied out!
That dream symbolizes why it can be hard to save money.
The bank customers represent how you spend your money. There are literally thousands of things competing for the dollars in your wallet or purse. From new clothes, online purchases, dining out, utilities, cell phones and every other thing you can imagine. Its hard sometimes to distinguish the difference between a want and a need. Our mind will justify a simple want and turn it into a need. I also believe some people are just more prone to be spenders. The bottom line is that it's a self-control issue. You must limit your spending to less than you make.
On a side note, my 23-year-old college student just asked me what I was blogging about. I showed him this article. He said, because it's fun to spend, it releases endorphins. He's right, you get a small high when you spend money.
You are the teller. Actually you are the bank itself. You are the one watching your own money. I'm not sure why I didn't just close the window? Sometimes you have to just stop spending. Remember it's your bank and your money, you don't have to hand it out to every want and temptation that comes along. In fact, you can also stash some in the vault. I've seen other people who are just natural savers. They aren't necessarily cheap, they just would rather make do with what they have. Often they just spend significantly less than they earn. These are usually the clients that have six and seven-figure portfolios.
There are other reasons that you may find saving really hard. It could be that you hate budgeting. So you overspend. It could be procrastination. You just are waiting for the right time to save money. You think you'll save more when you make more money, or pay off a debt or get that raise. It could also be that you are not serious about your future. You're just living for today.
How do you save more money?
Automate your savings. Figure out a way to get the money away from yourself before you have those temptations. Schedule a regular amount to go into your savings or retirement plan every month.
Give yourself a savings raise. That means every time you get a raise, contribute more to savings or your retirement plan at work. Or you could just increase the amount by say 1 percent every six months.
Pretend it is a bill. I've always been really good about paying my bills. But like many people, when I had a young family, I always had an excuse for not saving. If you treat savings like a bill, then you might be more likely to save.
Save a percentage. If your income is irregular, then you should save by percentages. That makes it easier when checks are smaller to stay in the habit of savings. You'll save more from big checks, but the point is the habit of saving. Right?
There are so many reasons to not save. I can think of one good reason to save...your future. If you don't do it, you won't have much of one.
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