Having trouble saving money? It’s alright to admit that you do. Although I’ve never been to an Alcoholics Anonymous (AA) meeting, the first step to quitting is something you should take to heart – admit that you have a problem.
It’s no use denying you have a savings problem. If your bank account is down to double digits by the third week of the month, that’s proof enough.
But why is it so damn hard to save? Well, the answer lies in your attitude towards spending.
Here are 4 such habits you should recognize and eliminate if you want to escape the vicious cycle of living from paycheck to paycheck:
1. Believing that More Pay = More License to Spend
As you progress through your career and gain more experience, you’ll probably earn your fair share of pay raises, promotions, and bonuses.
Don’t get me wrong – scaling the corporate ladder, earning a fat bonus, and moving up an income bracket or two is a good thing. But you shouldn’t let yourself get seduced into thinking that your pay raise gives you license to spend like a drunken U.S. sailor at Orchard Towers.
With greater financial power, comes greater financial responsibility. I know, you’ve worked your ass off for your promotion or pay raise – but more pay does not equal more spending.
At the very least, save at least 20-25% of your pay (and bonus!) before you start thinking about the needs and wants you’ll be spending on.
2. Having a “First You Get the Money, Then You Get the Power” Mentality
If you’ve watched the movie Scarface (don’t forget to read our article 3 Critical Lessons ‘Scarface’ Can Teach You About Career Success), you’re probably familiar with the concept of “getting the money, then getting the power.”
It’s true that having more money can help you feel more powerful, especially when you’re spending your bonus or much of your income on a fancy new BMW, Rolex, and a few Burberry suits.
The reality is that spending your hard-earned cash every month on ego-boosting possessions that are more liabilities than assets won’t earn you any more power or respect in the workplace or in public.
What’s worse, you might end up setting yourself up a Lehman Brother-like financial meltdown if you continue on the path towards an unsustainable lifestyle.
Plus, you might attract #4 on this list – and you don’t want that!
3. Wanting Gratification Here and NOW!
Life is short. We all understand that. But choosing to forego the principle of “saving for the future” in order to live a “here and now” lifestyle is a horrible mistake that’ll come back to haunt you once you hit retirement age.
I get it. You have cheap and miserly people in your life who are major ass… *ahem* jerks because they are incapable of making the occasional discretionary purchase.
You don’t have to be like them!
Seriously, it’s possible to save money AND spend on the things you love if you save first and then set a tight budget on your personal spending.
If you don’t have a budget, check out these articles: The Only Budgeting Plan That Will Ever Work for Singaporeans and Here’s Why You’re Broke Every Month And How to Change That.
4. Supporting a Gold Digger
A lot of people tend to think that “love” is an expensive emotion. On the contrary, from a financial standpoint, it’s much cheaper than lust or simple affection.
Why is that? Because someone who “loves” you won’t expect nightly fancy dinners, badger you to buy a Mercedes, ask for diamonds, luxurious holidays, or demand a supplementary credit card. And if he/she does, well then you’ve got a gold digger on your hands.
Singapore is already the world’s most expensive city to live in, so add a gold digger into that equation and what you’ve got is:
World’s Most Expensive City + Gold Digger = Your Ass Will Be Broke Soon
That is of course, unless you’re a High-net-worth Individual (HNWI) who can afford such an expense. Otherwise, it’s probably best you drop the gold digger before he/she drops you!
What are some other reasons why Singaporeans can’t seem to save up? Tell us what you think on Facebook! And to find even more useful information on everything personal finance, visit MoneySmart today!
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