Saving Money is Difficult. We know that. In this article, we share with you reasons why you are not saving any money every month and what you can do to change that
Everyone wants to save money…..every single day. Then why are you not saving money and why does it feel so difficult to save a little daily!! Even we, (financial literacy practitioners at Sanchayan Society) find it difficult to save money every month on month. This kept bothering us and we finally sat down and discussed this to find the root causes of “non-savings” or “why we fail to save”? Some of the root causes for “non-savings” according to us are:
- CAUSE 1 – At the end of the month, we save whatever we have left after our expenses and personal and household desires have been fulfilled.
- CAUSE 2 – We don’t take savings seriously because we know that we will earn salary again next month, so we will save next month. Why bother too much now?
- CAUSE 3 – As a couple, we don’t talk about savings as much as we should. We talk more about expenses and our needs.
- CAUSE 4 – We push savings to the end of the month. Money if finite and finishes every month, before we reach the decision on how much we have to save this month.
- CAUSE 5 – Unforeseen expenses like repairs & maintenance or buying a air conditioner or some kitchen appliance takes up the balance, leaving nothing.
- Other personal or psychological factors
So, after analyzing the root behavioural causes why we don’t save every month, what can we do practically so that we actually start saving money?
Below we list some easy ways for you to start saving money every month:
- Transfer Savings on Salary Day – Decide and immediately transfer a percentage of your salary to a separate bank account on the day that you receive your salary. This percentage can be 10% or 20% or more. You decide. But do it. Don’t debate it.
- Make Savings a Habit – Don’t postpone savings to next month…or next month….start this month. Make it a Good Habit and create a culture of savings among your children and family members.
- Talk about Savings – Take out time to talk about savings. Make savings a dining table discussion just like families talk about foreign holidays or buying property or gold while having their dinner.
- Save Daily – Save in a “gullak” a piggy bank that you can keep in your bedroom on the dressing table or bedside table. This age-old technique works wonders and before you can count, your piggy bank becomes heavy and full. Ready to go to the bank!!
- Teach Your Kids – It’s not easy to save money! We won’t lie to you. As a couple who teaches and preaches financial literacy, we find it difficult to save every month. But we have started now, with a little every month. Teach this to your kids. Leave a Legacy.
- Create an Emergency Budget – Yes, create a small emergency budget every month (even if you don’t use it) and keep that money away in a separate account. You can use this budget to buy kitchen appliances or household items when you need them so that you have manage to save even in that month. You can use this budget to fulfill your desires too, like buying a mobile or bike, car, etc.
- Plan your Budget – Last and most importantly, plan your budget with a 10% plus or minus variance. So, your budget should not change by more than 10% every month. Identify, write down and spend as per budget and stick to that.
That’s all for now. We will keep posting simple articles on savings, personal finance, money management, expenses, holiday planning, travel, cash management, banking, insurance, and other personal finance concepts.
In our next article, we share 10 simple tips how you can save money every month.
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