Do you feel like a failure because no matter how hard you try, saving money is just plain difficult? You aren’t alone. According to Harvard economist Sendhil Mullainathan and Princeton psychology professor Eldar Shafir, authors of the book, Scarcity: Why having too little means so much, “Saving can be affected by the very fact that you don’t have enough.”

No kidding, you’re thinking.

But it’s more complex than the obvious. Here’s the idea:

“If you have urgent current expenses to cover, the future priorities like college and retirement fall off your radar because they are simply less pressing. Scarcity of attention [read that again!] prevents us from seeing what’s really important. The psychology of scarcity engrosses us in only our present needs.”

So maybe you’re thinking, “Fine, there’s some mind-over-matter work I need to do here. But I still don’t have enough, so how the heck can I save for the things that are really important?” They aren’t saying it’s simple, but they do say it’s possible. You’ll need to take some steps to put your long-term interests higher up on your list.

Here are the tips they offer:

  • Automate saving. Take advantage of tools like automatic deductions for your 401(k) and auto transfers at your bank to build your emergency fund.
  • Focus on a goal. In a study looking at goals, those who received a monthly reminder were 6% more likely to save. When that reminder included a photo, it went up to 16%. Create a goal, add pictures that will inspire you, and put it where you’ll see it.
  • Keep your priorities straight. If you don’t have a steady paycheck, saving can be very hard. But interestingly, the authors cite a study showing that when someone gets a sudden windfall of $10,000, they’re more likely to spend $20,000 because they think they have all this extra money. Instead of spending the money, it should go into a savings account.

Saving isn’t easy. But with some focus and perseverance, you can make changes that can help you reach your long-term goals.

 

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