emotional side of saving money

The Emotional Side of Saving Money

Saving money is a lot more about self-discipline than about how much you make. Everyone wants to save money, but very few people actually maintain a successful savings plan. Why is that? How do you develop the emotional fortitude to create a savings plan and actually stick to it?

==>Why Most People Don’t Save Money, Even if They Feel Like they “Should”

Here’s the truth: Most people don’t save money because they just don’t place a high enough priority on it. And because saving money is inherently hard and inconvenient, it just doesn’t get done then.

Almost everyone feels like they “should” be saving money. They’ve read the articles talking about how important it is to start saving when they’re young for retirement. But they still don’t follow through, simply because it’s just not a high enough priority.

==>Your Earnings Doesn’t Make a Difference

A lot of the people who’re laden with the most debt are also some of the highest earners. Doctors, lawyers, stock brokers, etc to drive expensive cars and play a constant game of “keeping up with the Jones’.”

On the surface, they’re making a lot of money. And a from a gross income perspective, they are. But when you look at their actual balance sheets, they’ve got so much debt from the big house, nice cars and lavish lifestyle that they’re actually spending more money than they’re making.

The amount of money you make won’t make a difference on how much you save. Saving is simply a habit of taking 5% to 15% of your monthly paycheck and putting it in an account you don’t touch, whether you make $1,000 a month or $10,000 a month.

So don’t wait for that promotion, that next pay raise or that next job to start saving. Needing to make more money is a poor excuse not to start saving today.

==>Coming Up With a Good Reason to Save

The most important step to coming up with the emotional determination to save consistently is to come up with a compelling reason to save money.

If you’re trying to save money just because you feel like you “should,” that’s probably not going to be enough. You need to have a reason compelling enough that you’ll actually go through the discomfort necessary to save up money.

What’s important to you? If you’re young, the idea of saving up for retirement 40 or 30 years in the future might not be very compelling to you. On the other hand, if you’re planning on having kids, then saving up so they can have a good education may be incredibly compelling.

Finding the reasons why to save can involve some pretty deep soul searching about where you want to take your life. Do you want to buy a house? Do you want to marry? Do you want children? When do you want to retire? What kind of lifestyle do you want when you do retire?

Answer these questions and find the central reason for you to save. Once you have that compelling reason, the emotional motivation will surface by itself.

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