MoneySkills with Nelson Letshwene

Money & the psychology of money

Savings | Why is it difficult to save money?

saving and spending

saving and spending (Photo credit: 401(K) 2013)

George Clason said it best: a part of all I earn is mine to keep. The principle of keeping money has been at the root of building wealth since money was invented. It is only those that are able to keep money that are able to build wealth. It does not matter how much you make, it matters how much you keep. Those that are expert money spenders do not have a hope of building wealth. The worst are those who play the money game with other people’s money, that is, borrowed money.
What are the reasons that many people can’t practice the keeping principle?
Many people’s financial lives are unstructured. Everything is a surprise and therefore everything is an emergency. There is no forward thinking and there is no plan that is being followed. Even things that should not be a surprise are always a surprise including school fees and birthdays; and some people are in the habit of solving such “emergencies” by taking a loan, which creates other obvious problems of living for your creditors. So, problem number one, lack of structure in your finances will prevent you from being able to practice the keeping principle.
Lack of purpose or “reason why”. Purpose creates motivation. Without a strong enough “Why”, most people never save! This means setting goals and targets for saving. Saving money for no particular reason is not a good way to practice the keeping principle. You need to create a strong reason and motivation for saving.
Lack of proper financial planning; and ignorance of proper financial tools and instruments that you can use to catapult you into a wealth builder.  If you choose to use the stock market as your tool, you must be informed of its intricacies so that you can derive maximum benefit from your efforts. If you choose to use real estate as you tool, you have to know a lot about that sector. If you choose business, you cannot be a scatter-brain that runs from business idea to business idea.
Sabotaging yourself includes what we call stealing from yourself. You save for a particular purpose, like, to put down a deposit for a house, and then you divert the money to buy a car or to some other project unrelated to your initial purpose. That is self-sabotage. You are what Walt Kelly’s cartoon character Pogo meant when he said: “we have met they enemy, and he is us!”
Planning and not following your plan. They say if you fail to plan, you have planned to fail. But then again, if you plan and do not follow through, you have also planned to fail.
And of course there are a lot of disempowering beliefs that make you think it is impossible to build wealth through savings! Check your beliefs. The enemy could be right inside. It is time to change your mind about your capabilities!

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One comment on “Savings | Why is it difficult to save money?

  1. masedi
    June 28, 2013

    hello Rre Nelson. Thank you so much for the insight. I always read your article in the guardian news paper and i am always uplifted. Please sir may you continue to post me your articles.

    thank you.
    masedi.

    Like

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