Not everyone is a saver by nature – far from it. Many people believe in living for the moment because you never know what disasters are lurking around the corner. Who knows; a killer virus could come along at any moment and completely wipe you out!
Oh, wait, that already happened.
But there’s an essential point people make when they talk about the need to live in the moment. They’re pointing out that life is uncertain and short, and that always looking forward to a brighter future is no way to live. You have to give yourself some pleasure right now. Putting it all off into the future is an enormously risky strategy. You never know what’s going to go wrong.
Partly, though, this attitude is a very clever excuse not to save. While it is true that “you never know what’s going to happen next,” it’s also correct that life is a game of probabilities. Something could go wrong for sure. The proverbial bus could run you over at any point. But the actual likelihood is pretty low. Most people live to be around eighty years old. We’re not all dead by the time we’re 35.
Facts like this make the case for saving much more compelling. You would think that continually forgoing pleasure in the present and saving it for the future would be an impossible task – and an unwise one. But many people do it. And it eventually pays off massively.
So what can we learn from people who actually save? What are their strategies, both practical and psychological?
They Don’t Set Minimums On How Much They Save
For the person who loves saving, any amount of money stashed away is progress. It doesn’t matter if it is $5 or $5,000 – it’s all still worth it.
The reason is that saving money today is always better than saving it in the future. Even a small amount of money can grow into a large sum with time, gaining interest as the months and years pass by.
They Always Look For Opportunities To Save On Essentials
Most people agree that the basic costs of living are the most significant headwind for accumulating substantial savings. You’re continually bleeding money on homes and cars and can never get ahead.
That’s why people who are serious about saving, take on the cost of living head-on. They know that if they want to make substantial progress with their finances, they have to downsize and reduce their outgoings. It’s not easy, but thanks to modern tools, like https://www.insurancequotesmn.com/, it’s not as hard as it once was.
Reducing the price of home insurance, car insurance, and rent is all much more comfortable than it was in the past. You can even bring down the cost of medical insurance premiums if you know where to look.
They Believe That Slow And Steady Wins The Race
Savers know that accumulating wealth doesn’t happen overnight. Instead, it takes consistent effort over a long period to generate real results.
They also note that the more they save, the bigger the rewards.
An investment portfolio of $10,000 will yield between $500 and $1,000 per year, on average. But if you have $100,000 stashed, annual returns are ten times as high!
They Find A Compelling Reason To Save
As people, we love spending. It brings us enormous joy. Putting it off, therefore, can be a challenge.
A woman discussed on https://www.cnbc.com/, however, found that she was able to overcome her tendencies to want to spend money when she found the right motivation. Her reason was that she wanted her daughter to be able to go on a school trip with her classmates.
If you can find your reason, you can find yourself doing exceptionally well financially. Saving is tough at the start, but it soon snowballs. And when it does, you don’t have to make as many sacrifices. Once compound interest gets to work, you can mostly sit back, relax and wait for the money to roll in. You end up with much more money than you had before, giving you options.
Thus, in summary, you can learn a lot about saving from people who’ve actually done it. Notice that during this article, we haven’t talked about the income side of the equation at all.
Instead, we’ve focused on the psychology of successful savers and how they think differently from everyone else. If you can learn some of their techniques, then you stand a much better chance of securing your finances.