Why is Saving Money so D$#@ Hard?

Why is Saving Money so D$#@ Hard?

Life is full of decisions; daily, we make decisions on what to eat, what to wear, who to talk to at work, and believe it or not, we decide daily on whether to save money for retirement. What I mean by that is a decision to not decide on a savings plan is a decision to not save. Did you get that? Procrastination on your savings plan not only costs you real dollars with that whole compound interest thing, but it is an unconscious decision to put other priorities over your future goals.

This is probably not news to you and I am not trying to make you feel bad, all I am trying to do is help you understand why saving is so D$#@ hard, and why it’s worth the fight to get on track. First, why is it so hard? Well there are a few points I want to make here.

1) Science tells us that the brain has an incredibly hard time identifying with our future selves. In fact, saving money for retirement is essentially convincing yourself to save money for a stranger. Can you imagine a random guy walking up to you on the street and saying, “pardon me, good sir, could you spare a few dollars for my 401(k)?” Without having a clear picture of what your future goals are, this is literally the same scenario for your brain. To bridge that gap, I encourage you to sit down and think about what your future holds. College expense for kids, retirement at 67, or starting a business would all be good goals, but you have to get more specific. Which college and for how long? Bachelors, masters, PhD? Retire- where, to do what? Are you going to work part time, are you going to travel, will you volunteer? Where would you volunteer? What business? Oh, a coffee shop, great! What is your mission statement going to be? The point I am making here is that your future vision has to be HD quality to trick your brain into giving up luxuries now for something that is going to happen in the future. Think through the details and make your vision clear, then you will know what you are saving for.

2) The whole world is against you: I’m sorry this isn’t more upbeat but seriously, have you ever heard the saying YOLO, as in, you only live once? First of all, that’s not true, you will live for eternity in one of two places and acting a fool on this side of eternity because you think all the fun will be over when you die is a terrible idea. (Email me if you want to discuss this further). Secondly, YOLO is a common attitude that keeps people from saving. The society we live in is constantly after your dollars for new clothes, new cars, new houses, better schools, cooler vacations, better food at the latest hipster joint. Everywhere you turn, someone is trying to separate you from your wallet and it is only getting worse. None of those things, in and of themselves, are bad but honestly, it’s all a little overwhelming. This is where you have to learn to say NO to yourself and to everyone who is seeking to get to your dollars. John Maxwell taught me to see everything in trade-offs. When you make a decision to spend money today, start asking what this purchase will prevent you from doing in the future. You don’t have to do it on every purchase; I don’t find myself saying, “What will this delicious chic fil-a spicy chicken sandwich keep me from doing in the future?” But I ask myself about big purchases. What will spending $600 on mountain bike do to my savings plan and what will that mean for the rest of my spending for the year? The point is that you become intentional on your spending decisions as you begin to evaluate your true priorities.

3) Lastly, your competitive spirit, as it plays out on social media, puts you in a constant race. I will write more about this next week in my blog called Facebook is killing your 401(k). As for today, all you need to know is that keeping up with Joneses is not keeping up with everyone you ever knew because they are all on Facebook and post every purchase, every trip, every toy and every new car online for the world to see. How come no one ever posts about having a fully funded emergency fund or that they increased their 401k contribution to 15%? Why might that be considered vain, but a picture of me on my $5,000.00 vacation is total acceptable? Our constant need for approval and commonality is costing us money in the future because it affects our decisions today.

Savings does not happen by accident and believe me, it doesn’t get much easier as your income goes up. Don’t get me wrong, if you have 5 kids and make $50,000.00, you are probably not going to save 15% of your income. However, for 8 years, I have worked with people who say, “Well, if I could just get this raise, or if I just get that Christmas bonus, then I would save.” Liar! I’m calling you out right now, right here! I’ve seen year after year in meetings with families whose income was up, yet their saving had stagnated. Saving money is hard, so is losing weight, and so is recovering from a heart attack and having to work at age 75.

Make the effort, be intentional, get help if you need it.
Caleb Bagwell

Caleb Bagwell/Employee Education Specialist

John Maxwell Certified Leadership Coach
Grinkmeyer Leonard Financial
Toll-Free: 866.695.5162 / Office: 205.970.9088 
1950 Stonegate Drive / Suite 275 / Birmingham, AL 35242

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Securities and advisory services offered through Commonwealth Financial Network, Member www.FINRA.org/www.SIPC.org, a Registered Investment Adviser.  This communication strictly intended for individuals residing in the states of AL, FL, GA, KY, LA, MD, MS, OK, PA, SC, TN, TX. No offers may be made or accepted from any resident outside these states due to various state regulations and registration requirements regarding investment products and services.

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