Why is saving money so difficult?
In my teens, my mother attempted to encourage my sense of self-identity by giving me a clothing allowance. Rather than spend it, instead I stockpiled my money and rotated my wardrobe between two pretty hideous polar fleece tops – it was the 90s and polar fleece was everywhere.
I’ve always been a saver, but let’s face it, I’m a little odd. Given the choice of spending money or saving it, most of us would probably choose the former.
So, why is saving money so difficult?
According to psychologist Nigel Latta, we’re programmed to think of saving as a loss – money that disappears into a figurative black hole. On the flip side, we love the instant gratification that comes with spending, which is the reason why superannuation accounts are often dismally overlooked until we’re much closer to retirement.
Change your saving mindset
Another way to think of saving is money we get to spend… later. To do this we need to set realistic goals at the outset to make the task more achievable. Most of us are just not cut out to deprive ourselves of a huge chunk of our cash flow the way a Biggest Loser contestant does with their calorie intake.
How to make saving money easier
1. Set up a separate account for your savings Choose a saving account with a higher interest rate or one with bonus interest if you don’t withdraw your money. Many banks also allow you to hide your saving account from yourself online by adjusting your settings.
2. Automate it We are much happier to save if we don’t actually see the money we’re saving. Set up an automatic payment into your separate saving account so that when payday comes, you won’t miss what you never had.
3. Set a goal Decide on what your “spend later” money will actually get you – whether it be a holiday, a new car or even a deposit on a house, it’s much easier to save towards something you really, really want.