Are you one of those who just can’t save? No matter what you do, you can’t save. You start but then along the line, you derail and then you beat yourself up about it because, “you have a bad spending habit”. Well, let us look at the mysteries behind savings and the psychology that makes it go round.
What is Saving?
Ever heard the term “Save for a rainy day”, it is almost always the first thought we have when we think of savings. In fact, most people believe that you only save for days that something goes wrong. That is one belief that needs to be debunked.
Saving in finance means setting aside money for later. It could be for an emergency or it could be for a venture we want to undertake, but the point is, we save because it is one of the ways we look out for ourselves, not because we are waiting for the shoe to drop.
The Pressure That Comes With Saving.
You earn so little and then you think, “just how am I to save when this is peanuts?”
Well, no one is saying not to be aware of your situation but what happens when you become aware of it? Do you walk forward or draw back? Let us get one thing straight about savings. It only becomes easier the more you do it. Just get to doing it and like every other thing, you find that it gets easier as you go. The belief that saving is hard is only an imprint of our bad habits and an excuse to not save.
It is also funny how when you save, a problem worth that amount of money rises. The solution, as crazy as it seems, is not to take away the money from savings to solve that problem. That is why you are not able to save. The solution is looking for other ways to solve that problem without using your savings.
See, when it comes to your finances, you don’t just need to earn big money. You can earn millions and still be broke. The focus is on your management. How you use it, where you use it and why you are using it. Your systems say a lot about your person. You don’t just need to be good at counting money and noting reputable opportunities, you also need to be money intelligent, savvy and understand patterns and personal charts. You need to learn to think outside the box.
“The solution is looking for other ways to solve that problem without using your savings.”
Then how are we supposed to solve problems or even buy stuff? What if my savings is the only money I have?
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Questions like that may have popped up in your head while reading this. There is something called the priority ladder. Many of us let our desires cloud our judgement and ability to think. Once a problem comes, because we have the money for it, we throw money at it and then find ourselves in another dilemma way more urgent than the last. Most times, these problems may not even be problems at all and just a strong desire to have/do something.
The solution is not throwing money at the problem, it is finding other ways to solve the problem. This is where you are forced to use your brain to think and exercise your problem solving skills, but sadly, many people give up before they even come up with one solution.
I mentioned priorities above. One thing I do when I encounter a problem that needs me to spend, I weigh my options. I objectively look at the problem, take time to process and look from another angle. I ask myself questions like, “do I need to do this now? What impact would it have seven days from now? Can I wait and address it later? If I take out the money, can I refund it within 14 days? In those 14 days, what possible problems could I encounter? Do I have options aside from my savings? Should I take those options? If yes, why?”
Now, for you to honestly answer these questions, you must understand your patterns and spending habits. How often do you buy groceries? How often do you spend on transportation? When was the last time you bought cooking gas? Would you need to refill soon? Are utility bills paid? How much would it affect you if you put off that problem for the next 14 days? Why do you need to solve that problem?
Asking yourself questions like this can be really hard the first time, especially when you need to look at patterns and take note. Trust me when I say, it seems difficult but the more you exercise it, the easier it becomes.
Begin With Little Steps.
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To get into the habit of saving, start by identifying a need and set a deadline. When you do that, you will then need to apply discipline to your habits:
- Always save that money no matter how small it seems. It is a compound effect not a one time thing.
- Stop and think before you spend. Ask yourself questions, be truthful with the answers.
- Address your needs, put aside the wants for later. You don’t live to impress anyone.
- Do not compare yourself to others. You don’t know their back story.
- Every penny/naira matters. Be intentional. Take record, track your expenses, and income. Do not give into the temptation of letting life happen to you.
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