5 Reasons Why Your Savings Plan Money Will Fail – Save money and plan for the future, it should be at the start of the day. Sometimes, start saving for the future is very difficult.
How is the solution? Here are 5 reasons why Your savings plan money will fail
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1. You don’t commit to your plan
It’s just like every New Year’s resolution. You just don’t put enough effort and commitment into your money-saving plans. Yes, motivation will run dry and you’ll find yourself second-guessing on whether this is all worth it. Is eating slightly less than usual worth it? Is walking and boarding public transport rather than traveling by taxi worth it? Is pushing aside instant gratification by not buying those clothes you desire worth it? Here’s the answer — Yes. A resounding yes.
The answer is yes not because you’ll be able to gain extra money at the end of the year. No, it’s not that. It’s not because of the money at all. It’s this: self-satisfaction and self-worth. If you fail this money-saving plan, at the end of the day you’ll ask the ‘what if’ questions. Regrets. You’ll be regretting. Like I said, it’s not about the money. You’ll regret it because you never proved to yourself. You’ll never be able to prove that you could do something to benefit your own life. Even with something as easy as following a plan. This is one success in your life that you’ll never get acquainted with. So stop second-guessing. Change requires you to transcend the struggles.
2. Your plans are not specific enough to accommodate Murphy’s Law
It’s true. Life, as cliche as it invariably seems, is unpredictable. There’s always an expected moment where you see yourself forking out extra money to fund for something you didn’t account for. It could be social pressure from your friends to chip in for an expensive present for a friend’s birthday. It could be fines that you had to pay for illegal parking. It could be the cab fare you had to fork out for waking up late. It could be clinic fees when you unexpectedly fall ill. There are a million reasons for this, and you don’t even know how many times a month these happen. So here’s a simple solution to a complicated problem:
Set aside miscellaneous savings. It’s as easy as that. Every month, set aside $200 to about $300 just to accommodate for unexpected spending. Make sure these savings are parted from your main bulk of finances. Whenever the miscellaneous savings have a balance, snowball it to the next month. Accumulate it. Your miscellaneous funds will evolve into ‘rescue money’. It’ll save your soul when you need money badly. Caution though, it’s going to be difficult to stop yourself from spending that extra money accumulated it since it’s not part of your budget. But make sure you resist. See number 1.
3. You don’t have an organized weekly routine/habit
Sure, this point may sound like the previous one. But this one’s more about the bigger idea. You need to have a routine for yourself. If you’re employed, there’s a higher chance that you have an organized or stable daily routine. Sometimes occupations thrive on uncertainty in terms of scheduling and employees find themselves at home at 3 pm on a Monday or shopping at 11 am on a Thursday. If this is you, then you need to plan a weekly personal schedule. Once you’ve got a week’s worth of work in your schedule from your employer, immediately spend some time and plan your whole week. It’ll help you to predict your expenses.
It’s good that you leave your life instantaneous and turbulent (in the most fun and self-benefitting way possible). But when planning to save money, you need to gain better control of your life. The next tip will help everyone who thrives on an unpredictable weekly schedule.
4. You don’t find cheaper alternatives
Cheaper alternatives always exist. It’s a question of whether you’d disburse extra effort just to attain that alternative. Food is one aspect in your spending that will always have a cheaper alternative. Should you spend on an expensive but delicious pasta at a restaurant that costs beyond quite expensive.
or cheap laksa in hawker (an equally delicious)? How about transportation? Is there an alternative to driving? Are you able to walk distances shorter than those few who seem to ride public transportation? In any case, there is always an alternative when it comes to online shopping. Alright, this is not an alternative. It is more like an add-on that helps you save a lot of money if you are a compulsive buyer.
5. You don’t embrace a drastic change in your life to fit your money-saving plans
his is the most important part of your money-saving plans. To save as much money by the end of the year as possible, you need to embrace change in your life. You can’t expect yourself to remain stagnant if you’re trying to achieve this. It’ll just be another meaningless idea. Something needs to change. This is probably the first rule that everyone fails to expect when embarking on a plan to save. It’s the root to why all New Year resolutions never materialize.
You need to prep yourself before starting to save. There are two ways to do this:
Progress slow – Let yourself be slowly accustomed to the change that comes with your plan
Habits are difficult to change. Similarly, jumping into a plan that requires you to substantially change your daily routines and habits might shock your mind. So progress is slow. Perhaps the amount of money that you save in the first few weeks and months does not have to be too extravagant. Start with 30% – 40% of your intended amount. Then slowly increase with every week or month. You know yourself better than anyone else.
Do weekly challenges of the full plan
It’s like a trial version. See how long you can sustain your money-saving plan without damaging your body or affecting the people around you. If the plan is extremely exhausting and you predict that it’ll damage your body, then level down on the difficulty of your plan. Alternatively, go slow and let yourself gradually get accustomed to it. We’ve written a great post about saving money that you could embark on or you could mimic some of the points that we’ve laid down. Click here to read it!
Conclusively, it’s very easy to save money. It requires attention, commitment, diligence, and smarts. There is always a way to go about saving money. You could build your way of being frugal once you’ve ticked off all these obstacles that leave you in failure. Go on, save up!
In conclusion, understanding the common pitfalls that can derail your savings plan is crucial for achieving your financial goals. By recognizing issues such as a lack of clear objectives, insufficient budgeting, and the impact of lifestyle inflation, you can take proactive steps to address them. Building a successful savings strategy requires discipline, regular evaluation, and adaptability. By staying informed and committed to your savings plan, you can overcome these challenges and create a secure financial future.
Frequently Asked Questions (FAQ)
1. What are the common reasons savings plans fail?
Common reasons include a lack of clear goals, inadequate budgeting, unexpected expenses, lifestyle inflation, and failure to monitor progress.
2. How can I set clear savings goals?
To set clear savings goals, define specific amounts you want to save, establish timelines, and prioritize your goals based on urgency and importance.
3. What is lifestyle inflation, and how does it affect savings?
Lifestyle inflation refers to the tendency to increase spending as income rises. It can erode savings if new expenses outpace financial growth, making it essential to maintain a budget.
4. How often should I review my savings plan?
You should review your savings plan regularly—at least quarterly—to assess progress, make necessary adjustments, and stay aligned with your financial goals.
5. What strategies can help me stick to my savings plan?
Strategies include automating savings, setting up a budget, tracking expenses, and using apps or tools that promote accountability and progress monitoring.
6. How can I prepare for unexpected expenses?
Creating an emergency fund, typically covering three to six months’ worth of expenses, can help you manage unexpected costs without derailing your savings plan.
7. Is it ever too late to start saving?
It’s never too late to start saving. While starting earlier can yield more benefits, developing a solid savings plan at any stage can help improve your financial situation over time.
