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Have you heard the saying that something can be simple, but not necessarily easy? I know it’s supposed to be clever and motivating, but hearing that is kind of depressing. I don’t want this chat about savings to take that turn at all. How about, “savings can be simple AND easy.” Unfortunately, 21% of Americans still don’t have a savings to their name. As if the pandemic didn’t scare us enough! Soooo, let’s explore some ways we can change our psychology and behavior to make saving enjoyable and dare I say—on autopilot.
First, some stats from MarketWatch:
- Northwestern Mutual’s 2022 Planning & Progress Study revealed that the average amount of personal savings (not including investments) was $62,086 in 2022 (down from $73,100 in 2021).
- As of April 2022, just 4.4% is the personal savings rate, according to data from the U.S. Bureau of Economic Analysis — that’s the lowest rate recorded since September 2008.
- Nearly 1 in 5 Americans didn’t save any money in 2021, according to recent data from the latest MagnifyMoney Savings Index.
Basically, all that to say, too many Americans are a paycheck away from personal financial calamity.
Why You Need Savings And Why It’s Hard
Honestly, life by lifing…medical bills, car accidents, emergency trips, home repairs are all threats to the delicate balance that is your budget. Not to mention the human nature desires to purchase new things to maintain our lifestyle.
But everyday we’re already experiencing instant gratification and pressure through marketing. Some of the topics I discuss in the episode include Amazon Prime Same-Day shipping, sales messaging that promotes a scarcity mindset, and BNPL (Buy Now, Pay Later) options that effectively get us to increase our cart totals.
Lastly, we have to come clean about something. Saving is literally rooted in delayed gratification. It’s against our human nature to appeal to our side that wants instant gratification. It requires discipline and WAITING to act on our goals. So how do we workaround this discipline thing?
My Savings Tactics That Work Around Discipline
Get clear with your goals. Don’t just save to save. Set short term goals to find your stride and then work up to bigger goals. And with bigger goals, you can’t just set it and forget it. Check in with your progress often and reward yourself with something that doesn’t include spending.
Next, try to gamify the process by making savings fun. Use an app like Qapital to track your goals and to semi-automate the process. I also dedicate time to contribute to my savings and pay my bills while I’m in a good mood. It makes the process more appealing! I even leverage the “punch the pig” feature with my bank to make it even more corny and hard to ignore!
But most importantly, don’t have a scarcity mindset. Remind yourself that the money can be reversed into your checking account when you absolutely need it. But don’t cheat yourself by not putting the money away at all because you see the dip in your immediate spending money.
At the end of the day, you only want to implement one to two of these tactics that you think will work for you. Keeping the strategy simple will truly make it easy. I mentioned in the title of this episode that saving can be done without discipline, but we didn’t actually address that. You know why? Because something that is done regularly without discipline is simply a habit. Make saving for future you a healthy habit that you never worry about. Literally saving for yourself is the healthiest “deprivation” you can impose on yourself. If you truly get into a financial pickle, you’ll have your savings to fall back on as an emergency (and that’s exactly what it’s intended for).
Try my free budget template if you need help with allocating your bill money, savings, investing, and spending.
Are you vibing with the golden nuggets ✨ I’m dropping in these episode? Binge the full podcast at bchicu.org/podcast, and don’t forget to review it on Apple Podcasts so we can reach more people!