You have a decent income. You understand how to set a budget, and you know that you should be saving as much of your paycheck as you can. You need it for emergencies, retirement, buying a home, and many other future needs. Try as they may, however, a lot of people still end up with empty bank accounts. Is it really so difficult to save money?
Spoiler alert: saving is not as hard as you think, and the most significant barrier to success is nothing else but you. Once you realize that, it becomes much easier to kickstart a consistent saving habit.
The Harsh Truth about America’s Saving Habits
According to surveys, a large number of Americans lack positive saving habits. Data says:
- In a study done by The Associated Press-NORC Center for Public Affairs Research, roughly 2/3 of Americans are unable to come up with $1,000 in an emergency.
- The average American tucks away less than 5% of their income.
- A whopping 20% of all Americans don’t save at all. Even those who do fail to save a substantial amount.
Recognize yourself as one of these people? Good news: it’s not too late.
Wanting to save is just one step in the path to building good saving habits. The next step is where most people stumble and give up – recognizing the barriers that make saving seem such an impossible thing to do.
Why Is It So Hard to Start Saving?
If you find yourself asking this question, you’re on the right track. It means the desire to save is there. To stay on that path, you need to analyze exactly what’s getting in the way of you having savings. These are the most common barriers:
- You have no idea where your money is going.
Where does your money go every month? We’re not talking about your regular bills like rent, water, heat, and electricity. It’s more about what you do with the rest of your money. How much do you spend on eating out and entertainment? How many cups of coffee do you buy each week?
If you have no idea where your money goes, you’ll find it difficult to figure how much you should save, and which of your expenses you should trim down to do so.
Therefore, start by going over your monthly expenses and keeping track of every cent that goes in and out. Create a budget that carefully details where you spend your money. Once you know where your money is going, you’ll be able to control it better.
- You don’t have any goals.
Why are you saving? Without a concrete goal, you may find it impossible to get motivated and stay faithful to your saving habits. “Having more money” is something we all want, but in terms of goal setting, it’s pretty empty.
Instead, make your goals as specific as possible. Some examples are:
- I want to own a house and pay it off by the time I turn 55.
- I want to retire with $2 million dollars in retirement savings by the time I’m 60.
- I want $2000 in emergency funds within one year.
A concrete goal gives you a clear finish line and being able to visualize your goal can inspire you in working hard to achieve it.
- The thought of saving money is making you feel restricted.
Some people feel that saving their money takes away from their present enjoyment. Instead of getting to spend their income on things they enjoy right now, they’ll have to put it in a savings account instead.
This self-defeating perspective is one of the hardest barriers to saving. The truth is, having a healthy savings account actually gives you much more freedom.
Instead of worrying about emergencies, for instance, you get peace of mind knowing that you’re protected no matter what happens. Having a substantial retirement fund means you can enjoy your golden years instead of being forced to keep working to make ends meet. If you’ve set a leisure goal, such as traveling the world or picking up your dream hobby, your savings will help you make it happen.
When you save, it’s not just about money, but what it represents – the freedom to live the life you want without getting restricted by financial limitations.
These are the top three barriers that get in the way of developing good saving habits. Which one of these are you struggling with? Facing these issues and taking steps to overcome them is one of the best ways to set yourself up for savings success.
3 Unusual Ways to Become Better at Saving Money
If conventional savings advice is not working for you, give these unusual tips a try:
- Think like a six-year-old.
Trick your subconscious brain into helping you save through sensory cues. Just like children, we find it easier to stick to a goal when we can experience it.
For instance, saving for a trip to Italy? Sketch a picture of the Colosseum. Visit a local, authentic Italian restaurant. Listen to some Italian music. The more you can smell, touch, taste, and see your goal, the likelier you are to pursue it.
- Scare yourself.
This is actually a cool psychological trip: picture the worst scenario that can happen if you fail to save. Imagine yourself at the age of 65, retired, and without a dime in savings. Where are you and what does it look like?
Focus on the worst possible scenario that can happen. In doing so, you’re triggering your subconscious to drastically change your behavior in order to avoid that future situation. In this case, the only way to avoid it is to start saving.
- Automate your savings.
Another brain trick is, well, not involving it at all. Place your savings on auto-pilot to relieve the pressure of always having to decide when and how to save. Studies show that those who automate their savings get to save more than 200x over those who do it manually.
To do this, you can set up an automatic savings account with your bank which will draw money from your paycheck at a time you specify. No effort, no stress— just a nest egg that keeps growing, and you don’t even have to think about it.
Ultimately, it doesn’t matter how long you’ve been unable to save. What matters is that you start now. Give yourself the fresh start you deserve— secure your future by starting to save today, no matter how little the amount. Remember: the most important step is simply to begin.
[Read Next: Top 6 “Money-Saving” Mistakes That Can Blow Your Budget]
Tycoono Media Inc. and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. You should consult your own tax, legal, financial and accounting advisors before engaging in any transaction. Please refer to our disclaimer for more information.
