We all know that we should save for the future, but many of us struggle to actually do it. There are many reasons why you might find it hard to save. Let’s understand what stops you from saving so you can overcome this and get ahead.
Don't know how much to save
When you set a budget, you can work out how much you have available to put towards your financial goals. You need to know how much you need for your every day expenses - your bills, groceries, transport and every day spending. Then you can work out how much of the rest you want to put away and save.
Do you forget to save?
If you aim to save, but haven't specified how much or how often, it's likely you won't actually do it. Setting up an automatic transfer from your everyday account to your savings on or soon after pay day, means you won’t accidentally spend it. This also means you don’t have to remember to save and your money can earn interest as soon as it lands in your savings account.
Tempted to dip into your savings?
You may find it easier to dip into savings than to wait for your money to grow. Many of us find it easier to focus on the here and now than focus on the future. Our tendency to live in the moment can impact how we spend and save.
For example, research finds people can put off small rewards in the not-too-distant future to get a bigger reward later on. But if they have the choice between a smaller reward today and a bigger reward later on, they choose the smaller reward.
The trouble with our present bias and focus on the here and now is that we can find ourselves stuck in a cycle of spending money now rather than waiting for savings to grow.
Do you give up when you go off track?
Do you ever dip into savings then give up on what you're saving for? Don't be hard on yourself. Things happen and we all go off track sometimes.
To help yourself from giving up, try to account for moments where you might go off track when setting your goals. Thinking about what future slip-ups could get in the way of your goal can help you put a plan in place to get back on track.
If you have a GoalSaver or NetBank saver account with us, you can even track your goal in the CommBank app. This can help you break your goal into weekly targets and set up automatic payments.