A study conducted by The Global Aging Institute and Pru Life UK in 2015 showed that nine out of 10 or 90% of Filipino workers worry about their retirement. It is because of their little or no savings in the present.
Most families live paycheck to paycheck. With all the expenses that need to be paid, saving money can be very difficult for a typical Juan. PSST.ph shares five reasons that make saving money a challenge for an individual.
No clear financial goal
If one has no short and long term goals, Juan would just live life the #YOLO way. When money comes in, he spends it all since he does not have any future plans for himself or his family.
One has to be motivated to start saving. Saving money takes a lot of patience so for one who has no goals in the first place, it would be a difficult thing to do.
Delayed gratification does not matter
Financial goals take years or even decades to achieve. Spending money offers short term happiness while saving does not. Honestly, it feels great to buy something new – that latest phone in the market, the newest fashion trend or the new restaurant that went viral recently seems worth the try. They are too hard to resist. When you do not value delayed gratification, it would be impossible to save since the urge to buy something new will not stop luring you.
Many people still cannot save money even with a recent salary raise or promotion. It is more likely because of the so-called lifestyle upgrade. The demands increase when the supply does. Sometimes, the basic necessities are no longer basic. Do you think you are currently in this situation? You can figure it out by checking your monthly expenses – which of the things you bought were “needs” and which of them were “wants”?
Comparing yourself to your workmates, friends, and neighbors is normal. However, constantly dwelling in this behavior can lead a Juan to poor financial choices like buying things for wrong reasons. It is possibly just a purchase out of a desire to impress others. This is not helpful when you are trying to save money.
No emergency fund
The first step to investing is by having an emergency fund. An emergency fund is three to six months worth of your regular income. If you do not have an emergency fund, your savings will suffer. When the “rainy days” come, you will have no choice but to use what you have saved. Building an emergency fund is essential in your journey to financial independence.
Why is saving money a challenge?
We all want to be among those who obtain financial freedom. However, the road is not easy – you will have to give up many things and be more disciplined to get there. Saving money is hard but attainable when you have the willingness to do it.