This is more of a rhetorical question that anything, but one that we should address because if we confront why we are not doing something that we know we should be doing, it might help us change our behavior.
Brain Matter. One of the problems is that our mindset is dysfunctional. What we mean by that is that we value the wrong things. We tend to value extravagance rather than day-to-day saving and frugal actions. Here’s a tip that will help you in this area. The next time you find yourself drifting into wanting something that you do not have, imagine yourself with the item and having to put up with the expenses of owning it. This works well for high-ticket items like boats, new cars, etc.
Keeping Up With the Joneses. We all have heard that this is a bad idea, but many get trapped into this thinking. We allow the race for the ‘bigger and better’ to get to us. It is much easier to remember the neighbor’s boat when you do not have one and want one than it is to remember that you have a solid savings account and are planning for your future. Do not allow yourself to be caught in this race.
Borrowing Keeps You Down. Many keep borrowing more and more just to keep up their lifestyle for their friends and family when what they are really doing is throwing away their financial future for a few fleeting moments of pleasure that will be gone in a few days or months.
What Can You Do? Here are some tips that might help you to better save for the future.
First, force yourself to save. Use automatic deposits to your bank accounts not only to direct deposit your paycheck, but to build wealth for the future. Add a percentage point per year to your 401k contributions from your paycheck. Next, if you have direct deposit at your employer, find out if you can have more than one account. If so, create a savings account at a different financial institution and then have a small amount of money deposited there out of every paycheck you get. Make it difficult to get to the money so that you will not be tempted to withdraw it and spend it frivolously. You will be surprised at how fast your savings will grow.
Next, if you get a raise, immediately put that money aside into your savings account, or contribution to your 401k. Look at it as a raise to yourself for the future. Do the same thing if you have a second job. Immediately deposit that paycheck to your savings account
Knowing this, you should be able to motivate yourself to follow some of these steps in order to be more savings minded.
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Thanks for contributing this wonderful article to the Carnival of Family Life, hosted this week at Write from Karen! Be sure to visit Karen’s site on Monday, August 25, 2008, and check out this week’s other excellent submissions!