Hard to Save

The country is in a massive personal finance crisis. The solution is tantalizingly simple to state yet can seem so difficult to do: achieving financing independence. Fundamental to this is being able to save but saving is really difficult for most people. Understanding the things that prevent us from saving can go a long way toward making us better savers. 

Your Savings Goals Are Not Your Habits

It’s a New Year and you’re full of enthusiasm and have probably made the usual resolutions to prioritize money saving, lose weight, read more and be a nicer person. Within a few months, most people will have given up on those goals. People struggle to save because there is a disconnect between their goals and their daily habits. Behind the lofty goals, there is a lack of true re-invention, of a re-imagining of who you are. 

In this sense, goals can be self-defeating. You get inspired by a documentary about some person who gave up all their belongings and went to live in the mountains and for three months, you live like a monk, and for the three months after that, you spend like a rock star. Goals can inspire change, but without real, and conscious transformation of your daily habits and your image of yourself, eventually you will revert to the old you. Your identity needs to change in order for your habits to stick and identity is very resistant to change. The cold, hard truth is that winners and losers all have the same goals. It’s not goals that set you apart, it’s the quality of processes you use to get there. 

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Learn Proper Money Habits

We all love those “3 months to success” stories. Yet this kind of thinking grossly underestimates the mental difficulties of saving or reducing debt. That’s why it’s important to learn proper money habits. Whether your own your own for the first time since high school, or you’re an older adult that needs training, going to college could be the answer. Since there is a high cost of tuition, a student loan with a private lender is a solid option for favorable repayment terms. Not only can you start repaying after graduation, but hopefully you’ll have the necessary skills going forward to create a budget and stay out of debt.

Choose a Repayment Method- Hard to Save

Repaying debt, or indeed, any financial goal is in reality about habits, and habits are best built piecemeal. It’s why the debt snowball method is a popular debt reduction technique. Even mentally harder techniques such as the debt avalanche method, work by breaking your debt up into small bits that make it seem less challenging to reduce your debt, and therefore makes you more likely to succeed. In other words, your strategy works best when it takes into account your own resistance to change. Your habits should sneak up on you, by growing from something so small you can’t say no, until they have completely transformed your life. 

Start off small and grow your financial habits incrementally. Over time, these gains will compute into something massive, even if each incremental change seems trivial. So, instead of trying to make life-changing decisions, make small changes to your daily habits. There are three keys to making a habit stick:

  • Start with the simplest, easiest version of the habit. A version so easy you can’t say no. 
  • Build that habit in very small steps each day. 
  • As the habit grows, keep repetitions easy. The total habit must always be broken down into small, easy habits. 
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