A broke person unable to save money | iStock.com
Americans today are pretty
awful at saving money. Since
25% of Americans
said they would give up showers in order to save money, systemic issues
like income inequality are likely more to blame than individual habits.
But don’t let that be your excuse. Even when you are near-broke, you
can still find
ways to save here and there. You can cut out
unnecessary expenses, eat your meals at home, and make a strict budget and stick to it.
Are you getting bored yet?
It seems that for some people, no matter how many articles they read,
no matter how many advisers they meet with, today’s wants simply
outweigh tomorrow’s needs. That’s not to say there aren’t people who
have money troubles for no fault of their own. But if your steady income
is accompanied by a history of
poor money management, unpaid debts, and bad financial choices in general, chances are good that you’re just a terrible saver.
To help you understand why you can’t seem to put any of your paycheck
aside, we’ve outlined some of the reasons people are so inept at
saving. If you can understand where you’ve gone wrong, it will help you
finally turn things around. Here are the major missteps of the
savings-challenged.
1. You keep upgrading your lifestyle
Fancy ride to the poor house | Aston Martin
When you get a tax refund or a bonus at work, is your first thought
to go out and splurge on a luxury? Impulse buying is one of the most
dangerous habits consumers can develop, and it can be made even easier
by sudden windfalls. This is how people get into the dangerous cycle of
unnecessarily living paycheck to paycheck. What happens is you justify
each purchase by telling yourself you still have money “left over.” You
might think of increased wealth as a chance to seek status symbols or
lifestyle upgrades. Instead, use your newly acquired wealth to break
free from old habits. If you resist the temptation to spend your entire
paycheck, you’ll find that a little security will give you much more
freedom than a lifestyle upgrade.
2. You procrastinate
Sleeping instead of taking action | iStock
There’s a reason why “pay yourself first,” is a
golden rule of personal finance. It’s
because if people don’t set aside money right away, most won’t do it at
all. The general idea is this: Take a certain percentage of your
paycheck and allocate it to savings, and the remainder is what you’ll be
left with to use for bills and other expenses. Bad savers are often
procrastinators, so they continuously tell themselves they’ll save
later. To take the pressure off, these kinds of consumers can benefit
from setting up automatic withdrawals each month. This gives you no
choice but to save, so you can stop making excuses to put it off again
and again.
3. You think saving is lame
Shopping won’t solve your money problems | iStock.com
Bad savers sometimes claim they like to “live in the now,” rather
than prepare for the future. Do you ever feel like you are stuck in the
present? It’s often a lot less glamorous and exciting than it sounds.
You can’t have much fun living in the present moment if your present
always feels like you are running out of money. Savers are actually
better equipped to take the occasional spontaneous trip or adventure
because they don’t have to wait for their next paycheck every time they
want to do something fun. Instead of focusing on what you want in the
here and now, and being disappointed when you can’t afford it, start
thinking about what you really want. If you can see past your immediate
desires, your bigger goals will start to motivate you. Then you’ll see
that saving isn’t a chore at all, it’s your ticket to financial freedom.
Culled from Wallstreetcheatsheet
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