Mistakes that prevent you from saving money effectively
Saving is also work, and in many ways it is work on ourselves. The main obstacle on the way of our money to our piggy bank is ourselves, and if we overcome our own difficulties, the process will go much faster and with greater returns.
Mistake 1 – haphazard savings
Irregularity is one of the most common hindrances to personal savings. If every time you replenish your “piggy bank” as you have to, for example, on a residual principle at the end of the month, then, if you calculate, the overall rate of growth of savings will be very sluggish. And in some months there may be “gaps” that have passed without replenishment.
Solution:
Change your approach to building savings. It is correct and effective to do it not at the end of the month, but at the very beginning, when you have money, and put aside a constant, pre-calculated amount each time. This way you will keep to the schedule and by the planned date you will get the desired result. Of course, if at the end of the month there is something left over, it would not hurt to put it in the piggy bank, but the main replenishment should go strictly on schedule and in full – this is just the case when discipline decides.
Mistake 2 – saving as a sacrifice
The more you save, the faster you save. On the one hand, this is a logical decision, but on the other hand, it is completely psychologically wrong. If the process of accumulation becomes a burden and makes you endure inconveniences, limiting normal consumption and preventing you from living, then you are clearly saving wrong.
Solution:
Don’t turn saving into a feat, don’t force yourself to endure hardship, otherwise neither the process nor the result will give you any pleasure. Maybe even worse – you will enjoy it and you will become a real Stingy Knight 😊 Find and keep the balance, so that the process does not prevent you from living normally (food, clothes, transportation, medicines, housing and utility bills, communication – you cannot save money by refusing to do so), but you can and should refuse from some excesses and unjustified spending.
Mistake 3 – impulsive spending
Has it ever happened to you: you save and save for something, and then suddenly – one! – saw something completely different and spent all your savings on it? If yes, then you are well aware of the problem with impulse purchases. According to statistics, they are allowed at least once a year more than half of the people, and it does not matter what impulse had to give in, to buy a car or a burger. It’s especially difficult with savings: you have the money, so it’s tempting to spend at least some of it, reassuring yourself that you’ll save more.
Solution:
Psychological scientists say that the most difficult thing in resisting impulse buying is to withstand the first few minutes of the “attack”. Further it will be easier: the brain gradually begins to assess the situation itself and extinguish the irrational impulse. After an hour it will be even easier, and if you managed to withstand a day – then you have almost coped with the problem. A good technique to help resist impulses will be to accustom yourself to “slow purchases”: do not give the money until you have thoroughly studied everything related to the purchase or took a piece of paper and wrote out all the pros and cons in a column. In this way, you will be able to remove the threat to your financial goals and better understand your own needs.
Mistake 4 – unprotected savings
By deciding to save money, we are, whether we want to or not, in a race against inflation. The longer we save, the larger the amount we have planned, the more purchasing power it will steal from us. So saving without thinking through the potential harm of inflation and protecting your money would be very unwise.
Solution:
A common mechanism to protect savings is to convert them into a form that will either slow or neutralize inflation, and ideally provide even more additional growth. There are two “popular” options: to make savings in currency (where inflation is lower, but you need to carefully calculate losses on commissions when buying and selling and possible fluctuations in the exchange rate) and to open a replenishable deposit or savings account (money remains in rubles, protected from inflation by interest income, which at the same time will accelerate the growth of savings).
To summarize: save systematically, save wisely, save not to your own detriment, do it coolly and, most importantly – protect your savings. And then success and realized financial goals are waiting for you!