Why Your Friends Can’t Save Money
Have you ever heard any of your friends complain that they just can’t seem to save money? Have you ever tried to save yourself and wound up failing? Is saving really about motivation or is there a secret that can you reach your financial goals?
Believe it or not, many people fail due to two things – external and internal influences. External influences include losing a job, getting unexpectedly sick or injured, or having your car totaled. Internal influences are the psychologically barriers we’ve placed on ourselves.
Becoming Friends with Money
Being properly motivated to reach your financial goals often means have a realistic relationship with money. What feelings do you associate with money? Do you think about security and control or do you worry about how it would affect you?
Use Psychology to Become Rich
You don’t have to be super motivated and self-disciplined to build your net worth. In fact you don’t have to dedicate a huge amount of time to make better money decisions. What you need is to make our psychological barriers work for us rather than against us.
Here’s one example – having a debt free vacation. What usually happens is that we say we want to save for our vacation, but instead we end up putting the trip on our credit card and slowly pay off the debt until the next vacation comes around and we repeat the cycle.
Here’s what you can do in 5 minutes. Go to your banks’s billpay portion for your accounts. Set up an automatic transfer of x amount of money (10% of what you last trip cost you if you want a number) to either your savings account at the same bank or better yet to a savings account at another bank/credit union. The key is to make it automatic and make it a bit harder to get to your money.
Alan Corey used this technique with his paychecks and saved money to fuel his real estate deals and become a millionaire before he was 30.
It’s not hard at all, but it works.
Psychology of Money
Curious to see what affects your money making (or losing) decisions? Check other posts in the series:
What have been some hurdles for you when it comes to saving money? What helped you to succeed where you had failed before? How long did it take for you to reach your savings goal?
Photo Credit: shortformvideo