Everyone knows that saving money is important. After all, the amount of money you will need in the future will definitely be much more than it is now.
Because you are not productive when you are old, if you don't have passive income to support you, all you will spend will be eating up your savings.
When it comes to saving money, the easiest way is of course to save a fixed amount regularly. Don't think too much about it and just put the money in when the time comes. Every month just treat it as if part of the money disappeared out of thin air.
It's easy to say, but for people who have never had the concept of saving money, if you are asked to save a fixed amount of money every month and not spend it, and do it continuously for several years, there will always be a sense of despair that the monthly output is never seen!
This is actually a question of psychology:
1. Weak ability to delay gratification (Delayed Gratification)
People are naturally inclined towards immediate gratification rather than long-term rewards.
Saving a fixed amount on a regular basis is like forcing yourself to "sacrifice current happiness" in exchange for future stability, which is extremely unnatural for the brain.
And how do you know whether you can really survive to the day of financial freedom?
2. Mental Accounting
How we categorize money affects how we use it.
Whenever a paycheck comes in, if it is not clearly “marked” that a portion should be saved, it will often be spent without you noticing.
3. The goal is too abstract and lacks a sense of achievement
The vague goal of "for the future" cannot produce immediate feedback, which can easily make people feel that saving money is a kind of loss and deprivation.
4. Sunk Cost Fallacy
When you have saved for a year or two and suddenly have an emergency or temptation, you may think, "I've already saved this long, it doesn't matter if I spend it." This thought will make you lose all your efforts.
5. Financial Anxiety/Memories of Poverty
Many people, because they come from an unstable economic environment, subconsciously believe that "money will be spent sooner or later", which makes it more difficult for them to save money because "if you don't spend it now, you won't have the chance to spend it in the future."
The above problems will lead to the collapse of the savings mentality. Although we know that saving money is important, we just can never do it.
There are actually many solutions, such as forcing savings, making goals concrete, and making good use of diversion to keep money out of sight... Open any financial textbook and you will find dozens or even hundreds of ways to teach you how to save money.
If you are using it to save the most difficult first pot of gold in your life, the way I most recommend is to break it down into short-term achievements.
Every time you save enough money for a while, reward yourself a small reward to stimulate the dopamine cycle in your brain, making saving money a pleasant thing. This will be the easiest way.
But how do you reward yourself?
Eat delicious food, buy something you've longed for, go on a long journey...
Although it all sounds good, my original intention was to save money. If I spend more money to reward myself, I always feel that I will not have enough fun. After all, in order to save money, I have to play with the limited budget.
Let's change the way we do it. If you deposit a sum of money at the beginning of the year, you will receive an interest payment at the end of the year, allowing you to spend it as you wish. Moreover, the interest payment will not affect the appreciation of the principal you deposit each year.
And once the preset deposit period or target amount is reached, you don't have to continue depositing. As long as you don't withdraw it all at once, it will continue to generate more interest every year than before, and you can spend it as you please. Doesn't this sound great? Or does it sound like a scam?
But it just so happens that there is such a good thing!
If you don’t believe it, you can ask your financial analyst, or a trusted risk manager or insurance agent, why didn’t I know about such a good thing? Why didn’t you tell me?
After listening to the above way of saving money, does your brain produce more pleasure dopamine? It is directly different from the previous ways that go against human nature and save money without spending.
Using this method of saving money seems to make difficult things become much easier and simpler.
Once you have easily saved up a pot of gold, you can start using the money-making method that rich people have always used to make more effective investments.
If you want your customers to save money, you should never rely on willpower, but on understanding human nature and designing an optimal system for each different person. That is the most humane way!
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