Why does Saving Money Seem so Difficult?

Most of us have been in that situation, where saving money seems impossible. We tell ourselves that we will save x amount this month, but by the end of the month, no money has been set aside. Typically, the lack of results comes from two things: an unstructured plan, lack of discipline. 

  1. An unstructured plan, and lack of discipline include things like: 
  1. Not having a budget in place.
  2. Not having automatic transfers to your savings account. 
  3. Impulse Shopping

The importance of a Budget

If your goal is to increase your savings, then you must have a budget in place. A budget keeps you honest, and helps you keep track of your expenses. You can create a spreadsheet, or a basic table with four columns.  

saving money

ExpensesBudget (money budgeted) Actual ( money spent)Total income 
Expense 1X amount ( how much did you budget for this expense?)X amount(How much did you spend?)Total expenses 
Expense 2X amount X amountTotal income – Expenses
Expense 3X amount X amount=Remaining balance
  • First column, list your expenses from 1 to however many expenses you have.
  • Second column, list the amount you budgeted for that expense. 
  • 3rd column, list the actual cost for that expense
  • 4th column, list your total income, total expenses, and deduct expenses from income to arrive at the remaining balance. 

After running the numbers, the budget will give you a clear picture of where your money is going, and whether you are meeting your goal or not. Analyzing the numbers is as important as making the budget. For example, If you spend more on groceries than you budgeted for, think of ways in which you can meet your target next month. ( Use coupons, shop when items are on sale, substitute products.)

 Set up automatic Transfers to your Savings 

saving money

Pay yourself first: Having automatic transfers to your savings ensures that you meet your goal.

Most people pay their bills, their wants, and then attempt to save whatever is left. As Robert Kiyosaki puts it in his book Rich Dad Poor Dad, you must set aside a sizable amount of your income, and then spend the rest. I cannot emphasize enough how crucial this step is.  

      Impulse Shopping

impulse shopping

How many of us are guilty of shopping impulsively? I am guilty of this myself. I received an offer from the local bike shop, so I decided to go in, and needless to say, I came out with a brand new toy. A 2018 Felt road bike with electronic shifters, power meter, carbon fiber frame, all for the outrageous total of THREE THOUSAND DOLLARS. I should have returned home, and think about the bike purchase for at least a week. Chances are that after a week, the impulse would have been out of the equation, and I could have made a more rational decision. I was getting the same enjoyment from my old bike, but I let impulse cloud my rationality and bought the bike without hesitation.

Conclusion

Saving money may look complicated, and oftentimes impossible, but that is not the case. If you stay disciplined, and stick to a structured plan, you will be able to save money. Set a budget, automatic transfers to your savings, and keep impulse out of your decision making. You can achieve whatever financial goal you set for this year.

Here is a LINK for ways in which you can make extra money.

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