Why Some People Save Consistently And Others Don’t.

When it comes to financial stability and discipline, saving is usually the first step that people struggle with. It is where self-control is required and where so many people fail to succeed at. When I was working in banking, I had two types of clients: the ones who had large savings account that consistently grew and the others who barely saved even when they tried. There were a few who had an average savings account, but the two categories were the major ones. After observing, discussing with clients and analyzing their habits, I concluded that there are some characteristics that lead to consistent saving. At first, it seemed obvious that those who could not save were simply not disciplined. However, though that might be the case most of the time, there are also other important factors to consider.

The goal of this article is to show you that you CAN save no matter what your situation is now. Saving is an essential component of financial stability regardless of your income. If you are struggling to keep a savings account, read below to understand why and how you can change your situation.

Natural aptitudes to save

When I was a kid, my brothers and I stopped sharing our bedroom very early. At the time, you could never enter my older brother’s bedroom or open his closet and not find his bed neatly made and his clothes neatly arranged and folded. On the other hand, though my bedroom wasn’t a mess, every time I would tidy it up, it would only take a couple days to need another session of tidying things up; every time… When we were in middle school, my brother would come home after school and list on our board every single task and homework he needed to accomplish that evening. This wasn’t taught to him, it is his personality, it came naturally to him. When I discovered Wired That Way and learned about the 4 different personalities, my whole childhood made so much more sense.

In terms of money management, there are individuals who are naturally very organized and disciplined because that’s just the way they are. It comes to them naturally and because they look for safety and assurance, they tend to save systematically. Some people also come from households where financial stability was taken very seriously and taught, thus it is natural and a must to them.

Not being a ‘perfect melancholy’ is not a reason to not be organized with your money. It is a reason to be even more intentional about managing your savings religiously. In fact, as you do it consistently and it becomes a habit, you’ll realize that it is then a natural aptitude of yours. Start by setting up a budget and don’t let up.

A defined goal

It is clear to me that those who have a defined savings goal tend to be more diligent with their saving habit. What is a defined goal? Amount and deadline. Many of the clients that I worked with were saving for a car, for a home, for their kids’ tuition, for college, etc. Others simply wanted peace of mind and that peace of mind has a price attached to it. Whatever it was, there was a destination and it pooled them and made their savings habits sharper.

I myself have seen the positive effect of having a specific savings account goal. As a result, Heather and I set a specific goal every year for our savings.

Do you have a defined goal that you’d like to accomplish or are you just hoping you could save some money?

Accountability

You may be the most disciplined person but at times, temptations are too hard to resist. Successful sport team and successful companies apply this principle: when people are expected to be accountable to another individual, they tend to behave accordingly. When it comes to saving, this is a crucial principle.

When I dealt with couples, I observed that those who had joint savings accounts – and had a goal – saved more. They depended on each other and it became a team effort. There were couple who did have joint accounts and still struggled to save. Combining your finances is not the secret. The secret is having a goal and making sure that you set a standard and stay true to it.

You may be single and have your financial affairs separate from a significant other, but you can still be accountable to someone. It does not have to involve releasing your privacy but how about just sharing how much you want to save from each paycheck? Find a friend and parent who could keep you disciplined and be accountable to them…and to yourself.

Gratification / Keeping up with the Joneses

The income that you make does not indicate how financially stable you are; it is just a cover and as the saying goes, do not judge a book by its cover. At the beginning of my career in banking, it baffled me to see individuals making six figure incomes and not having a dime in their savings account. They simply couldn’t keep from swiping their credit cards and buying everything that caught their attention. From trips to luxury cars, from clothing to the latest electronics, everything was bought.

When you are trying to save, you must learn delay gratification. Keeping up with the Joneses will get you in big trouble. I agree that it is not easy these days with the immense amount of marketing material that is thrown at us. But you must resist, it is a non-negotiable.

As an experiment, ask your friends who seem to be doing well in the saving department how they deal with instant gratification or keeping up with the Joneses. You will find that it is simply a matter of self-control.

Income

Lastly, income plays a huge role when it comes to savings. We should consider that as well. While I saw that many of my clients who made a lot of money were not disciplined, I also observed that it was bit easier for some to save. Have a more extra naturally leads to more savings for the organized and disciplined ones. Income, however, should not be an excuse. It is important to live below your means and budget in accordance to your income.

So, easier said than done, you may say. You could be right; and for those whose income is obviously not sufficient for their lifestyle or the cost of living, the only solution is to find ways to increase it. I am a big proponent of self-employment and entrepreneurship but if you’re not at that point yet, you may have to get another job (or a second one). It is about taking responsibility and working towards financial stability.

I hope you’ve learned here how you can change and/or improve your situation. Set a goal today, establish your budget, be accountable and start saving!