Saving without pain: why is it so
difficult to save and what to do about it?
Everyone knows about the basic rules: count expenses, save at
least 10% and avoid impulse purchases. But not everyone succeeds in
following them regularly. The reasons are that nature itself prevents us
from coping with lack of will and acting rationally.
Typical
mistakes that prevent you from cultivate the habit of saving money
When the salary is
small, it seems that it is barely enough for the basic necessities. But
low income is often a subjective feeling. In fact, people may have
misconceptions about what is necessary, causing many to live beyond their
means.
To understand how things really are, you need
to analyze your expenses and highlight those expenses that can be reduced. Even
a small amount that you save regularly will be useful and will help you develop
to cultivate the habit of saving money.
2. Lack of financial literacy.
Managing money
wisely is an essential skill that needs to be learned just like driving a car
or learning the basics of a profession. Basic attitudes are laid in
childhood, and saving systematically is better for people with developed
motivation and willpower.
But this does not mean that everyone else
cannot do it: you need to study various methods and rules, use savings
applications, and take financial literacy courses.
3. Lack of financial goals.
Saving as a
financial cushion is important so you won't be left without money if you lose
your job or suffer a serious illness. But it's also important to set goals
to give yourself extra motivation and an understanding of why you're cultivating the habit of saving money.
For example, a family vacation or a new
kitchen. At the same time, you need to clearly indicate the deadlines and
the amount that you need to save - this will make it easier for you to track
progress.
4. Lack of a systematic approach.
Cultivate the habit of saving money,
otherwise they will not give the desired effect. It is better to save a
little, but every month, than 50% from large incomes once every quarter or six
months. This will help not only develop a habit, but also reduce risks: if
you lose your bonus or the payment of bonuses is delayed, you will still have a
minimum cushion in case of force majeure.
It's also important to spread your savings
between your emergency cushion and long-term goals using different financial
instruments.
5. Too strict restrictions.
People who are prone
to impulsive spending and are not used to saving often start with extremes:
they cut all possible expenses and spend only on the essentials. Sometimes
this helps to accumulate the required amount in a short period of time, but
more often it leads to the fact that a person experiences stress from strict
restrictions and a feeling of guilt for the slightest deviation from the
budget. As a result, this approach does not bring any satisfaction, and as
a quick way to please ourselves, we resort to impulsive spending.
6. Too many temptations.
It’s difficult to
control yourself when there are a lot of irritants around: for example,
mailings with promotions in online stores or displays of desserts on the way to
work. If possible, keep these triggers to a minimum to avoid lapses and
overspending.
7. Negative financial attitudes.
This is everything
that shapes our ideas about how to manage money and behavior in relation to
finances. Attitudes are laid in childhood, by the example of parents, and
are formed on the basis of books and articles.
Negative attitudes prevent you from cultivating the habit of saving money and
approaching spending rationally: they suggest that any restrictions are
harmful, and that it is impossible to save up for something large. It is
best to deal with them with the help of a psychologist or psychotherapist.
How
our brain interferes to cultivate the habit of saving money?
Scientific
journalist and molecular biologist Irina Yakutenko in her book “Will and
Self-Control” tells how willpower is formed, which helps us achieve long-term
goals and why many fail to cope with this. Asya Kazantseva, a
neuroscientist and author of books about how our brain works, argues in
approximately the same way.
1.
Different departments are involved in decision making
Every time we decide how to spend money, these two departments are involved in the process, along with others responsible for working memory, rewards and motivation. As a result, our brain must decide in seconds what is more important: to enjoy the purchase right now or not to be left without money by the end of the month, when we will have to borrow or save hard.
But those departments that are responsible for
emotions arose much earlier and are often stronger than those responsible for
rational behavior: after all, at the dawn of evolution, a person had to
instantly react to any external stimulus in order not to become a victim of a
predator.
Now everything has changed: our well-being and
quality of life depend on willpower. But in order to force the brain to
make the right choice, you need to have very developed departments that are
responsible for long-term goals. This means that willpower and
self-control are largely genetically determined.
2.
Not everyone is lucky with their genetics.
It's not just about
the structure of the brain. We get pleasure from a process or result
thanks to neurotransmitters that are produced in the brain - serotonin and
dopamine. This motivates us to continue to do the same in order to
experience pleasure again. But some people naturally have trouble
producing these neurotransmitters.
As a result, in pursuit of light dopamine or
serotonin, they have to constantly resort to momentary pleasures, which quickly
develops into addiction. The same thing happens with thoughtless spending:
instead of delayed gratification, the brain demands a portion of pleasure right
now, turning off all departments that could interfere with this. Otherwise,
apathy, irritation and stress occur.
3.
Environment and upbringing also influence
However, in addition
to genetic ones, there are also epigenetic factors: that is, the influence of
environment and lifestyle. The healthier and more prosperous a person’s
environment, the greater his chances of correcting heredity for the better.
Even if a child was born into a family with
negative financial attitudes, but then found himself in an environment with a
competent approach, received a good education and built a career, his approach
to money can change for the better.
4.
Willpower needs to be constantly trained
Finally, willpower
does not appear once and for all: it must be constantly fed, otherwise it
evaporates over time. The more often we deny ourselves pleasant little
things, the weaker our reserves of will and self-control become. It can be
restored with long-term training, a healthy lifestyle and glucose intake of 420
kcal per day.
What do economists think about
it?
Neuroeconomics is a science that studies
consumer behavior from a psychological perspective. It helps explain why
we tend to spend impulsively and why sticking to long-term financial strategies
is so difficult.
Neuroeconomists note that for a long time we
lived in conditions of scarcity, when food had to be obtained by hunting or
hard work.
Now everything has changed: everything we need
is available to us, and we can get it in a second. However, our brain has
not yet completely rebuilt itself and still remembers the times when we had to
grab any prey as quickly as possible. Therefore, subconsciously, the
benefits of saving in the uncertain future are less valuable to us than the
rewards of buying right now.
Hence, the problems with rational behavior,
which marketers skillfully use to force us to spend as much as possible. For
example, attributing properties to a product that make its purchase rational
and practical in the eyes of buyers. Or offering “two for the price of
one” promotions so that people, in pursuit of profit, buy a product that they
don’t really need.
Moreover: experiments have shown that if people
are offered the same wine, but in different bottles and at different prices,
then the one that costs more will seem richer and more intense in taste.
As a result, there are too many temptations and
reasons to spend money right now and pay more, while financial literacy and the
ability to save require great willpower.
How to cope with lack of will and cultivate the habit of saving money
· Create the right motivation. Rely
on the fact that savings create a feeling of stability and security, helping to
cope with anxiety. You can experience this feeling now, and not in some
distant future;
· Influence the brain using emotions. For
the rational part to win, try to involve fear: for example, because of an
expensive smartphone you will not be able to go to the dentist, and then your
dental problems will have to be solved at a much greater cost and time;
· Pay in cash. When you hand over
banknotes, you are more aware of how much you spent, whereas paying by card
creates the illusion of safe spending;
· Unsubscribe from mailings,
delete applications and block online shopping sites where you most often spend
money. This will not allow you to make purchases in one click, giving in
to emotions;
· Understand the reasons. If
you regularly spend money to cope with anxiety and stress, consult a
professional. Together you can understand what alternatives to shopping
you can find and how to learn to manage your emotions;
· To have a break. If you really want
to buy something without urgent need, stop and think: what is the reason? Perhaps
you've had a hard day and your brain urgently needs dopamine. Maybe there
are other ways - for example, relaxing with your favorite TV series? If it
doesn’t help, promise that you will buy it tomorrow, or just move away from the
store to the nearest cafe. In 90% of cases the impulse will pass and the
rational part of the brain will take over;
· Train self-control. This can be
done in a variety of situations - for example, putting off the cake for the
morning. The more often you show willpower, the better your brain learns
good habits and gets used to not relying on emotions;
· Reward yourself. For many, saving is
associated with giving up small pleasures, so just thinking about it is
upsetting. Pick a day when you can buy yourself a cup of coffee or go to
the movies to stay motivated. New hobbies and meeting friends can also be
a source of dopamine, which will not allow you to relapse.
In
conclusion, cultivate the habit of saving money can be challenging due to
various psychological and environmental factors that influence our behavior.
However, by understanding the reasons behind our spending habits and
implementing strategies to cultivate the habit of saving, such as setting clear
financial goals, managing impulses, and training self-control, we can overcome
these obstacles. It's essential to recognize the importance of long-term
financial stability and take proactive steps to build a secure financial
future.
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