Saving goals are great financial targets. You are not only forced to make smart choices about your money, you are also setting yourself up for a secure financial future.
But we all know that saving vs spending will always be locked in a never ending struggle within us. In most cases, spending usually wins over the need to save. No matter how committed we are at the beginning, there will always come a time when we will falter and fail. That is what happens to most people.
According to a press release published on PRNewsWire.com for RetailMeNot, 48% of their survey respondents revealed that they will not survive more than a month with their savings. In case they lose their main source of income, their finances will not be enough to last them a month. That is almost half of the survey respondents.
We all know that saving is important. We all know the value of savings goals. But despite that, a lot of us still fall short. We still end up without enough savings to help us survive a financial crisis.
5 reasons why saving is more difficult than spending
Obviously, we need to get our financial act together. The things we hear on the news does very little to boost our confidence regarding our economic recovery. Everything is a lot better compared to the crash of 2007/2008 but we are still too fragile to trust that we are once again financially invincible.
To help you reach your saving goals, let us try to identify what keeps you from being successful at it. If other people can save, then that is proof that it is not impossible to accomplish in this day and age. But you need to look inside you to determine the factors that affect your ability to save instead of spend.
Here are 5 reasons that you may be able to relate to.
We are surrounded by buying temptations.
Everywhere you look, the TV, billboards, endorsements, and even the Super Bowl – all of these are infused with temptations to get you to buy. Companies spend millions of dollars to make their advertisements very effective. They only have one goal: to convince you that you need their product or service. They will tempt you and justify why you need to spend your hard earned money on what they have to offer. If they spent that much money, you can very well expect that it will be effective. Do not think that you can brush it off in a heartbeat.
To remove yourself from the clutches of these tempting products and services, you need to be able to differentiate what is a necessity and what is not. You have to know your finances very well to decide if you should spend on something or if it will benefit you more to just put it aside to fund your saving goals.
We equate success with material possessions.
You also have to be careful about associating your success with material possessions. It does not matter if you have a lot of possessions. They will not define your success or your happiness. In most cases, you will feel that the happiness brought about by these material things are only fleeting. In the end, you will forget the appeal of the items and they will end up as junk. If this is something that you can relate to, you have to change your spending style. If you concentrate on the experience that you associate from a product, then it will be easy for you to find a more economical version of that. It will help you spend less and in effect, increase your savings.
We associate our spending with our income
Another hindrance to our ability to save can be blamed on our mindset that our income should dictate our spending. This is a dead end that will always make your income “just enough” or worse, “not enough.” Whenever you get an increase, do not be too quick to upgrade your lifestyle. Your spending should only be dictated by what you really need to survive. If you can survive comfortably on $30,000 a year, you need to stick to that amount. Whether you earn $30,000 or $300,000, sticking to spend only what is necessary will help you put aside the money. That is how you reach your saving goals.
We have a need to belong.
We also have this need to belong. This is what makes us spend more than what we really need to. We try to match what our friends, colleagues or neighbors have – even if we really do not need them. This is explained in a LearnVest.com article. According to the article, this is related to what is known as social proof. It is when individuals are easily swayed by the opinion of others. If your friends tell you that a product is really great, you are compelled to get your own. This can be useful but only if the people around you are influencing you to make smarter money choices. If not, then you know that you need to learn how to think more independently.
We fail to realize that we have control over our money.
Lastly, we almost, always fail to realize that we have control over our money. If you plan on reaching saving goals, this is something that you have full control over. You just have to make sure that you will override the habits that will lead you elsewhere. The real challenge here is to win the battle within ourselves. You want to make sure that you have the discipline to say no to yourself. In the end, that is where we most fail.
Tips to make sure your reach your saving targets
There are many tricks for saving money but it is important to learn that the implementation is very important. You have to be able to adapt these tips into your life for it to make a difference.
Here are 3 things that you may want to do in order to reach your saving goals.
- Set-up automatic transfers. You can inquire with your bank as to how you can do this. Whatever amount you want to save, have it shaved off your salary immediately. If you don’t see it, you will not miss it. The compulsion to spend your savings will be gone.
- Put a representation of your saving goal in a visible place. Whether it is a car, a house or an early retirement, put a visual representation of your goal in a place that you often go to. It can be in your workstation, in the kitchen, in the fridge – any place that will remind you of what you are trying to accomplish. Some people put a photo of their goal in their wallet or attach it on their credit card. It helps remind them why they need to rethink their spending decision.
- Tell someone about your goal. Lastly, you may want to tell someone about your goal. That way, you get to feel more accountable for your saving goals. The person you will share it with can remind you of your goals every now and then and might even be able to help you through financial advices. Joe Mihalic, the man behind NoMoreHarvardDebt.com, admitted that publishing his goal in the blog helped motivate him. The feat of paying off his student loan debt in 10 months is not easy. But since a lot of people know about his efforts because of his blog, it pushed him and encouraged him to exceed his expectations. The result is being debt free 3 months early of his goal.
Your saving goals will help you improve your life but you need to remove the hindrances first. Make sure you can identify what is applicable in your life so you can start making better choices about your money.