Saving money. We all know we should be doing it for retirement and have money tucked away for a rainy day. But it is harder said than done.
The reality is, if you don’t pay yourself first, you will end up paying yourself last and there won’t be anything left!
But saving money just isn’t as much fun as spending it. Saving money for retirement is just too far away when you are in your 20’s or 30’s, having the newest and latest piece of technology is much more exciting.
Gerry Mitchel in his recent article for The Meridian Star ‘The Psychology of Saving’ makes some very interesting points. Here is a snippet.
Why do some households save more than others? Building household savings may depend not only on cash flow, but also on psychology.
With the right outlook, saving becomes a commitment. With a less positive outlook, it becomes a task – and tasks and chores are often postponed.
Financially speaking, saving is winning. Sometimes that lesson is lost, however. To some people, saving feels like losing – “losing” money that could be spent.
So assert Ellen Rogin and Lisa Kueng, authors of a recently published book entitled Picture Your Prosperity: Smart Money Moves to Turn Your Vision into Reality. They cite a perceptual difference.
If people are asked if they can save 20 percent of their income, the answer may be a resounding “no” – but if they are asked if they can live on 80% of their income, that may seem reasonable.
There may be a gap between perception & behavior. Since 2001, Gallup has asked Americans a poll question: “Thinking about money for a moment, are you the type of person who more enjoys spending money or more enjoys saving money?”
While more respondents have chosen “saving money” over “spending money” in every year the poll has been conducted, the difference in the responses never exceeded 5% from 2001-06.
It hit 9% in 2009, and has been 18% or greater ever since. In 2014, 62% of respondents indicated they preferred to save instead of spend, with only 34% of respondents preferring spending.
You can read the full article here
For more information on any of our programmes or you would just like to have a chat, drop us an email and we will be in touch.