Why Saving is So Hard and How to do it Anyway

by

Hint: pay yourself first.

Woman holding a glass jar filled with coins

This article originally appeared on Girlboss.

The concept of saving money has always stumped me. Why does it seem to be easy for one person to save and seem almost impossible for another? No matter how many compound interest charts you see, how much more money you’re making, how many times you tell yourself it’s going to be different this year – it just doesn’t happen.

While there is no magic formula – no 50/30/20 ratios or lectures about avocado toast – I can tell you that we all save or don’t save for different reasons. When you figure out what those reasons are, you’re going to realise it has nothing to do with how much money you make or your self control. Then you can be kinder to yourself and give yourself permission to let go of those reasons you’ve been holding on to, creating new habits based around your values today and your goals for tomorrow.

Below are some guiding principles for how to start thinking about saving and build save-friendly habits that work for your life:

Pay yourself first

This one may sound corny, or stupid, or trite, but it’s how you need to think about your savings. You’re not just setting money aside for a rainy day, you’re literally paying yourself first. Or as one student in a recent workshop pointed out, you’re paying your future self first.

One of the most important things to remember is that this doesn’t have to be a huge amount. This is the other pressure I’ve seen people put on themselves when they hear this phrase. They tend to think that “paying yourself first” means you need to put away hundreds of dollars every month.

Paying yourself first is just the first of many gestures you make towards showing yourself that you’re building a new savings habit. So choose an amount that’s ridiculously manageable for you. Maybe that’s $200/month or maybe that’s $25/month. Whatever that amount is, commit to it and treat it like it’s another bill. Add it to your budget. Don’t miss a payment.

Saving is a decision first, and then a habit

The next hardest part is keeping that money in your savings account. When you look at that $25, you’re going to ask yourself, “what’s the point?” After all, $25 feels very far away from your goal of three months’ living expenses or even getting to $1,000. It’s tempting to want to take that money out for a new shirt or a nice dinner out, instead.

You start to do the math in your head and you think, “It would take me three years to get to $1,000!” and that nice dinner you could have right now is so much more appealing.

This is why it’s so critical to understand that savings is a decision that you need to make every single month, especially in the beginning. It’s going to feel completely unnatural and your mentally going to want to rebel. You have to choose to keep that money in your savings account every month, despite your brain trying to bargain with you to take it right back out.

Remember, you’ve spent years of your life both not saving and most likely telling yourself that you’re just not good at saving. It’s going to take time and energy to undo this belief you have about yourself. That starts with you deciding every single month that that $25/$50/$200 stays in your savings account. It’s the first step to you truly taking control of your finances.

To create a savings habit, you also need to change your spending habit

If you feel like you’re living paycheck to paycheck, you’re never going to feel like you can actually save. On the other hand, I’ve seen people get super gung-ho and decide they’re all of a sudden going to start saving half their income. Either way is doomed to fail.

This is why it’s important to have a full understanding of where your money is going and a commitment to changing your spending habits while you’re trying to create a savings habit.

First, figure out what your values are when it comes to your spending, then use mint.com to help you track and monitor spending that you want to cut back on. Take the amount you want to cut back on spending and base the amount you choose to save on real numbers.

Instead of saving for a thing, saving for a feeling

It’s easy to save for a thing. It might feel hard at the time, but you can buckle down for a few months or a year to be able to have enough money for that camera, laptop, security deposit, vacation, whatever tangible goal you’re heading towards. When you’re saving for a thing, you know you’re going to get to spend that money at some point in the future.

It’s much harder to save just to save. But here’s the thing. The best savers I know aren’t just saving to save. They are saving for security, or freedom, opportunity, stability, peace of mind. They are saving for a feeling instead of just a thing. While it takes more time to figure out what that feeling you’re saving for is, it also gives you a reason to not only save, but to actually have savings and be a saver.

Saving is not about the results, it’s about the process

I talk to so many people who tell me they’ll start saving when, “I get my tax refund,” or “my bonus comes in,” or some other windfall that’s coming their way. What inevitably ends up happening is by this time next year, that tax refund, bonus, windfall is completely gone again and you’re telling yourself the same story.

I get it. You want to feel like you’re winning right away, so you want to wait until just the right time. There will never be a “right” time to start. Your brain will always find a way to convince you to wait for an even better “right” time.

What you have to remember is you’re not doing to this to win anything, you’re not competing with anyone and there are no prizes or awards or medals. You’re doing this for you. No one else. So remember, the process is more important than the amount of money you have. Now is the best time to save. Because it’s all part of the process.

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