Psychology of Saving Money

We humans are financial creatures of habit.

Believe it or not, there is science behind the way we think and act, especially when it comes to our bank account.

Today we’ll pinpoint three common reasons why you don’t have money to invest. Instead of making excuses about your economic situation, become educated about your missteps.

Try using tools to help your financial situation. has a great excel budget planning template.  Arm yourself with knowledge and you will be able to identify, adapt, and overcome your economic hurdles.

1. Can’t Break Bad Habits

The psychology of saving money comes from our habits, both good and bad, make us who we are. And like it or not, our financial habits (ie. spending, saving, and planning) lay the foundation for our fiscal future.

Bad financial habits are one reason why you don’t have any money left over for new investment opportunities. The good news is that they are pretty easy to spot if you keep an eye out for them.

Maybe you spend too much money on things you really don’t need. Can you tell the difference between necessities and wants? You might be stuck in a credit card rut, using your little plastic friends to fund your over-the-top lifestyle. Have you ever seriously thought about living within your means? Or maybe you just never get around to depositing any money into that savings account you set up last year.

No matter what bad financial habits you have become accustomed to, there’s always hope for recovery.

  • Get out a piece of paper and list as many of your negative financial decisions that you can think of.
  • Focus on one habit at a time; you’re not going to solve every problem over the weekend. Choose one from your list and commit to changing your ways for the next month.
  • Find some accountability. It doesn’t matter if it’s your spouse or your best friend or a close relative. Allow someone in your life to hold you financially accountable and let them redirect you if you waiver on your road to recovery.
  • Consistency is the key. Keep at it and before you know it you will change your bad financial habits into sound and profitable experiences.

2. There is No Plan of Attack

Another reason why you don’t have money in your budget earmarked for investments is probably because you don’t have a sound financial strategy.

If you don’t have a financial plan, you’ll end up spending aimlessly. You owe it to yourself and to your family to break the cycle of living paycheck to paycheck. No matter what your income level, you need to know exactly how much money you bring in, how much you spend, and where it all goes.

Create a clear picture of what you want your fiscal landscape to look like.

  • Create a budget.
  • Develop financial goals.
  • Keep it simple (at least in the beginning).
  • Start today.

3. Afraid of Commitment

The last reason why your investment portfolio has yet to materialize is that you’re afraid of commitment. Let’s face it: you make enough money to invest, you’re smart, you have all of the financial tools necessary to save and spend wisely, and you even have a great financial strategy that allows for do-it-yourself investing.

But what you don’t have is the willpower to implement your plan and stick to your financial guns. You can’t follow through with your financial blueprint.

The lack of following through is one of the last hurdles to reaching your goal of investing. Follow these guidelines to victory over your commitment issues:

  • Trust the process. After you have researched all the necessary information about financial planning, it’s time to implement your strategy and trust your tools.
  • Stay alert. Things change, your income may fluctuate, your interest rates may increase, or you may incur some unplanned expenses such as medical issues or car repairs. Always be aware of your cash flow and adjust your budget accordingly.
  • Be patient. Don’t give up on the plan just because it takes time. Everything will take time, and you can either spend your time saving money for investing or you can spend your time wasting money and falling into debt.

You must choose, but choose wisely. Implementing a wise financial plan can result in a strong savings account, retirement account, college fund, and investment fund. You might have to change the way you think about your finances, but you’ll thank yourself for your wise decisions.

We want to hear from you. What are some financial hurdles that you have overcome on your road to smart spending and wise investing?

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