Getting Ready to Save and the Psychology of Spending
Ok, you know that you have to save money, cut down on your spending, and dig in for the long haul. But it’s so overwhelming—and you know you don’t have a penny to spare! Let me suggest, just for a moment, that this is not true. Saving is possible, and you can learn to spend less. But first you need to understand what saving and spending is all about.
To do anything well, you need to have a plan. Change rarely happens quickly, but comes incrementally, in small steps. These steps can lead to great accomplishments. It’s the Power of Small Change.
Saving is like this, too. Think about saving the same way you think about learning a new skill, whether driving a car, learning the piano, or playing baseball. You need to practice; to recognize what you are good at and where you need help. And you need to set a goal.
So, what is you goal? I know that you have hopes and dreams for yourself and your family; these might be for your kids to go to college, or for you to further your own education. It could be to own a reliable car, or your own home—both are wonderful goals and great reasons to save. You might want to save for next year’s heating bill. Or you might want to save for the unexpected—an emergency.
Whatever your goal, it’s important to keep your eye on the prize!
To be a successful saver, you need a game plan and a commitment to stick to it. Let your goals be your motivator.
Your game plan should include a budget. Developing and sticking to a budget is hard work, especially in the beginning. But once you get into the rhythm of saving, you will start to feel more confident and less stressed about your financial situation.
A budget tells you when and how to spend—e.g., rent/mortgage, utilities, food, clothing, etc. A savings account should also be a part of your budget—think of it as “paying yourself first.” The best savings strategy I know is to enroll in Direct Deposit at work and have a portion of each paycheck automatically deposited in a savings account.
York County Saves is a great resource for getting and keeping your motivation to save. Everyone who joins York County Saves receives a quarterly newsletter from America Saves, with strategies and success stories from Saves’ members; the opportunity to sign-up for wealth-coaching from an America Saves Wealth Coach, and information about wealth-building resources available locally and online.
For more information about York County Saves, contact Tori Leuteman at 324-5762 x2951 or by email at
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You can’t think about saving without thinking about spending. Did you know there is a psychology to spending? How you feel affects how you shop.
When you are depressed, upset or angry, shopping can make you feel better. Scientists have discovered that shopping releases the same “feel good” chemicals in the bran, called endorphins, that are released when one drinks alcohol, eats chocolate, or exercises.
So, rather than spending money when you are upset, try taking a walk instead. Go to the park, or check out a funny TV show. You will feel better knowing that you didn’t spend your money unwisely.
Envy shopping is another trap many of us fall into. Often we buy something just because others have one and we want to have it too. Whether it’s a great looking pair of shoes, a really cool cell phone, or a flashy new TV, you should ask yourself: “Do I really need this? Am I willing to spend my hard earned money on it? Will this keep me from reaching my goal?” Remember, whenever you are tempted, keep your eyes on the prize!
Beware of sales. While sales can offer you some items at tremendous discounts, the psychology of a sale is to tempt you into buying even more items—to spend your money on things that you don’t really need. Once you’re in the store, it can be hard to get back out. Be wary of sales—ask yourself before buying: “Do I really need this?” If you do, then buy it. If not, walk away.
Saving, budgeting, and spending are skills most of us need to learn. It takes times and practice. The reward is well worth the effort. Not only will you feel better about yourself, having brought financial stability into your life, but you will also be a role model to others, especially to your kids.
Small steps lead to great accomplishments.
Take your first step today.