I believe this topic will touch the heartstrings of many people, especially those of my age(21). We all have that few friends who never seem to be able to save. This caused me to ponder about why it’s natural for some to save and others find it a challenge.
Reflecting, I realise that this has quite a bit to do with (1)Habit, (2)Lifestyle, and (3)Ability to put off temptation.
Habit is one of the easiest trick to inculcate, either by self-discipline or under the supervision of others. When it comes to saving money, I realised that my parents have done a great job at inculcating it in me. It’s not a fool-proof plan, but it worked for me. So parents out there, and a reminder to myself when I have children in the future, start early. It’s always been emphasised to start early because that’s when children are most susceptible to learning! Whatever you say, they do. Strike while the iron is hot! Don’t wait till the iron is cooled down already then you try to mould it, it’s just not worth the procrastination. Because their lifestyle would have changed and everything would cost them more.
Personally, my savings habit began only in Secondary school, when I started receiving weekly allowance. I had to learn how to ration my allowance through the week, so this resulted in planning how much I allowed myself to spend each day. Initially I would receive just enough allowance, approximately $25/week? Then my father brought in the lessons on savings and decided to give me $50/week from then on. Having been used to spending $25/week, my lifestyle was fixed at that rate. This meant that I typically had $20-$25 of savings per week since I didn’t know what to spend on. Till now, this habit follows me. First I gauge how much I would spend in a new environment(During internship), then I do a mental calculation of how much I should be saving each week on average. Once you get used to spending a certain amount, just stick to it! That’s when savings can begin!
Lifestyle is another factor why many will find difficulty in saving. We all have different groups of friends, some who always spends, some who are your chilling buddies, etc. Depending on your lifestyle, the amount you spend and the amount you get to save varies. Eventually, we all have a lifestyle that we are more comfortable with. For me, I like to chill without spending too much rather than spend lavishly. So it’s naturally easier for me. For those who like to party or lead a more expensive lifestyle, it’s not wrong, but if you can’t keep up with the expenses, consider cutting it down. Remember, it’s a habit how much you spend and habits can be changed. It’s always hardest at the beginning.
Ability to put off temptation
I suppose this is one of the hardest skill to acquire. To put off temptation is to deny yourself of a feeling of joy! Why would anyone want to do that! It sounds silly, but without the ability to put off temptation, you also lose the ability to control your finances. You want something, yet you know it’s not good for you. If you don’t take time to think rationally whether you need something or not, chances are, you’re going to spend your money away.
I’m pretty thankful that I never find myself in a need for something too often. I seem to be happy with what I have and usually rationalise my purchases before actually buying it. My large expenses usually only come at the end of the year, as a christmas gift to myself. (It sounds sad, I know haha!) I always take it as a reward for myself and to motivate myself for getting through the year and to look forward to the new year ahead. For example, for my Christmas present in 2014, I got myself a nice watch that I still wear now. Then in 2015, I bought myself a kindle, only after 3 months of thinking if I should get it. I resisted the temptation for 3 months, not that I couldn’t afford then, but I was rationalising my purchase.
I think to improve on the ability to resist temptation has to begin with the small things, where it’s the hardest because everything is still easily affordable. If you can afford it, why resist the temptation right? However, I feel that the more easily affordable the item is, the better the opportunity to resist the temptation, because it’s the hardest. This trained me up slowly and gradually and you can too! Perhaps resist the temptation to buy Koi/Gongcha when you walk pass it, if you drink it way too often. Find an inexpensive yet unhealthy habit you’re engaged in and try out this experiment. See how long you can fight off the temptation, and keep trying! Everytime you fail, try again. (Consider reading The Power of Habit by Charles Duhigg to understand about the habit loop)
Let me know if you try this experiment and how it goes!