I don’t have money to save!

 I don’t have money to save! Money is, very often, the problem, but is it really so?

We’ve been talking about big financial goals that require a lot of money: buying a house, financially supporting children for their studies and a good start in life, and we’ve seen that we have two options for getting money: either we save it or we borrow it. If we choose the second option, we take more money out of our pockets for each of these goals, since we pay interest. The saving option is the happy one. But it comes with patience. Patience is the touchstone for saving. And, if we want to save, we have to train it 😊 .

I don’t have money to save!

To achieve your important financial goals, you need time and money. These two resources are extremely important if you want to have your own home, financial security, money for your children’s education. By financial security, I don’t mean having a job and that’s it, I mean having reserves if you need to stay home for a while, looking for a better-paying job or to have the money needed for an expensive operation and be able to recover in the long term.

Two important resources in planning: money and time

Money is a problem, most of the time, because it is scarce. This is where time comes in.If you have little money available to save, you can use the power of time to increase your money reserves. This is where patience comes in. It is very important.

If you don’t have much money, you use your time and wait longer until you accumulate more money. On the other hand, if you have more money to put aside, then the time involved in saving is shorter. Never tell yourself: “I don’t save because I have little money”; little by little will do more, over time.

Money is not a problem if you manage it effectively. Habit, in personal finance, is what determines the degree of achievement of financial goals. If you are used to saving small amounts of money, you will save even more. When your income increases, maintaining the current percentage, the amount saved will be greater. If you spend everything you earn now, when you have more money you will spend it all, and then.

Here are two solutions to the excuse: “I don’t have money to save!”

To have more money, you can increase your income, reduce your expenses, or do both, in parallel; this would be the optimal option.

Do you have friends who, once their salary increased, also increased their expenses? Has this happened to you?

My recommendation is to start taxing yourself: to put aside a percentage of the amount you earn, whether it is 3%-5%, or 15%; it is perfect. It is also perfect if you start with 3%. The important thing is the first step; you will get used to it over time. You also need motivation because you may not care whether you save or not until you have a strong enough goal, which you want and to achieve it you need money. Who can help you? If no one can help you with that amount (except the bank, but you don’t want to) it means that the reins are in your hands: you are the person who is 100% responsible for achieving it and you have to do something about it.

Increase your income

Why do I initially disagree with this solution? In fact, I don’t agree with going only with this solution, because it can’t be achieved in the short term, most of the time. This only solution requires having an additional income, starting to earn money from a hobby, taking a part-time job or working overtime.

To make money from a hobby you may have to allocate money. As for a part-time job or overtime, it requires you to allocate more time. You imply time to have the same level of income per hour. Most of the time all this leads to a desire to spend much more because “I work a lot and I need to relax”, and you spend all the money on vacations (during which you no longer earn money).

Reducing expenses

Reducing expenses is the fastest method. It should not lead to negative emotions. (Most of the time, the word “reduce” implies a “cut” – a negative aspect, and the expression: “reduce expenses” induces a state of frustration: “I can no longer do my pleasures”, but that’s not exactly the case.) It should not imply “stop doing your pleasures”, but quite the opposite. An analysis of the categories of expenses that give you pleasure and those that do not, is necessary in order to have the satisfaction of the present moment. The category of expenses that do not bring you pleasure must be reduced.

Optimizing your financial situation

Optimizing expenses involves finding solutions to maintain satisfaction, but also to save. Let’s say that the area that gives you pleasure is going out (well, I’m not referring strictly to the pandemic period now). You can find the solution to spend time with friends and otherwise that is much cheaper: going out to the park, going to someone’s house. In fact, now, a drastic decrease in expenses has been noticed in this category of expenses. And if you worry about the economy, it will work because you may make this reduction with going out but someone else does not because in his situation going out represents the greatest satisfaction.

Optimizing the solution conducive to financial life

Now, for everyone there is a suitable solution: either reducing expenses or generating new income. You have to see which one you want, the one you are reconciled with and apply that one.

It is possible to go for the first option and you are much more fulfilled if you do something you like and you will earn more than reducing expenses because it involves a psychological aspect that you do not want now, again, in your life.

The psychological expectation regarding the two financial solutions

You may have lived in a family where the importance was placed on reducing constant expenses. This may have happened where it was not the case. Now, of course, you no longer want this, it is normal and that is why you are looking for personal fulfillment from a financial and professional point of view. For you, the solution of generating new income is the optimal solution.

Cutting expenses may seem like the best solution to you. You don’t want to spend extra time generating income. Great! This is your solution!

There are two types of people and both do very well! You don’t have to automatically generate additional income. You don’t necessarily have to reduce expenses. Analyze your situation and do what is best for you!

You consider yourself a dynamic person and you want to do a lot, get rich and you think you have all the solutions to generate new income; you want to do it because cutting expenses seems like a much bigger chore than generating new income, then generate new income! Nothing is wrong as long as you are aware of the right way for you.

For a healthy planning of your income and expenses, we can meet in a financial planning and consulting session. Apply here: https://www.psihologiabanilor.ro/planificare-financiara/

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Good luck in becoming aware of the power that money has in our lives!