Every month we have the best intentions to save money. We set aside a decent amount determined to grow a savings fund, but always end up digging into the fund during the month. This unfortunately happens to most of us.

Why does this happen?

• We hate saving – if you consider saving with the attitude of it being a tedious chore that you feel like you are being forced into, then you are setting yourself up to fail every time. Approach saving with a positive grateful attitude.
• We are too ambitious – we try to save too much and end up having to dig into our savings. When we do, we get disheartened, and then spend it all eventually. “I’ll try again next month”.
• We want to see immediate results – we live in an age where we want instant gratification. If we don’t see our savings growing immediately, we get discouraged and give up. We need to have patience and commitment. 
• We need conditioning – saving doesn’t come naturally for most humans. We are not squirrels that store food for winter or go into hibernation. We need to be conditioned to save and build habits. Start with a small amount for 6 months. Once we get used to that savings idea and see the results, then increase the amount in small increments.

How do we fix this?

• Have a realistic budget – don’t budget up to the maximum of your salary. There are always extra expenses. You need to factor these in. Leave an amount to cover this.
• Our savings expectations are too high – we think that to save properly, we need to commit to a large sum of money to see a significant result.
• Start with less - If you end up spending your savings every month, then perhaps you are saving too much. Start with a smaller amount that you know you can manage. If at the end of the month you have money left over, then you can top up your savings.
• Make it difficult to spend – Save your emergency fund in a separate account and forget about it. Out of sight, out of mind. Leave the debit card at home and lock it away. This prevents you from spending on impulse.
• Invest your savings – Investing your savings into an investment app that allows withdrawal without penalties. It makes it more difficult to access and you see interest growing. Try Catalyst, deVere’s low cost no-term savings app.
• Allow yourself some personal spending – it’s pointless savings all your money and then digging into it to do impulsive spending. It is not a sin to reward or spoil yourself. You work hard for your money and deserve to spend some of it on yourself. Rather cut down on the savings amount to give yourself some spending pleasure. You won’t get resentful and have impulse shopping tendencies.

Saving is a slow and steady endeavour and requires patience and commitment. But the rewards are beneficial to your finances. It’s all about maintaining balance. Saving should be a pleasant rewarding experience and not a resentful avoidable task.

Your deVere adviser will help you get a realistic savings plan of action in place that you can commit to and won’t leave your budget in trouble. csvhelp@devere-group.com

Please note, the above is for education purposes only and does not constitute advice. You should always contact your deVere adviser for a personal consultation.

* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.