Why you can’t save
Some people have a knack for saving. They’ve been saving since they were kids and putting aside a little money each pay comes naturally to them – even when they’re not saving for anything! Hooray for them. For the rest of us saving, can be more challenging than flat pack furniture (yes IKEA, we’re looking at you) and about as much fun.
Here are some of the reasons why:
| You spend too much |
| Shockingly simple and you probably already know it. But just in case you missed it the first time – you spend too much. If you regularly spend more than you earn, you are on a one-way highway to Debtsville. Nothing much good happens here, you need to reset your sat-nav, starting with a visit to Budget-town. |
| You don't have a specific saving goal |
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Unless you are one of the aforementioned savings gurus, you know from experience that saving for the sake of saving can be tough. When you have a specific goal, however, things can get much easier because you have something you’re working towards. You have a good reason not to drop $80 on a new pair of black boots that are really only slightly different from the black boots you already have. You can hear the difference in the conversation in your head already: “These boots cost $80. I do have a similar pair, but it’s not like I need the money for anything else.” BECOMES “These boots cost $80, but I do have a similar pair and if I don’t buy them I can add $80 to my savings account and buy new boots when I get to New York.” OR EVEN “I am saving for New York so I’m not even going to look at boots.” Easy! |
| You don't have a plan |
| Saving a bit here and there can get you where you want to go, but this haphazard approach can also leave you feeling like you’re not achieving anything quickly which can make it hard to stay motivated. And now you’re going to New York, you need a plan. In order to have a plan, you need to know how much you need and when you need it by. Drop these figures into a calculator (like this calculator) and you can see how much you need to save each month to reach your goal by the set date. Alternatively, you can see how long it will take you to save your amount based on how much you can save each month. Having a plan can help keep you focused and gives you an end date to work towards. |
| You save last |
| So you’re going to save whatever is left over after you have paid for everything right? How’s that working out for you? Probably not all that well because most of the time there isn’t anything left over. We spenders tend to expand our spending to fit our available income. (Remember how you used to buy a $10 bottle of wine but now you probably spend about $20? Or maybe $50 if you’re celebrating?) The trick is to put aside a part of your pay first, pretend you don’t even get it. After a while, you probably won’t even notice it’s missing. |
| You try to save in your spending account |
| When you keep your savings with your spending money things can get messy. It can be hard to remember what part you’re allowed to spend and even harder resisting spending what’s there. Even if it’s only $25, you are still eating into your savings and if you do that 4 times you’re $100 down and New York and the boots are further away. Separate your savings into a different account. If the money isn’t in front of you and is harder to access it is much easier to not spend it. |
There are plenty of reasons why you might have had trouble saving in the past – it’s time to put all that behind you and begin anew. New York, here you come!
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Any advice in this information is general and has been prepared without taking account of your particular objectives, financial situation or needs. Before you act on any advice you should consider whether it is appropriate for you.
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