Dear readers, how often does your mind tell you "Just one more purchase", or "If I buy this now, I'll just save more next month"? Well, I'm pretty sure we all know how saving that extra next month goes. There is an enormous chance that the savings will not happen as we will have even more commitments or even more new stuff to buy.
We are by birth not trained to delay gratification. When babies are hungry, all they have to do is cry and parents will come scrambling immediately ( I'm not saying that is wrong - Just using it as an example). When they reach the age of say..5 and see a toy, they would ask their parents and then scream or show a tantrum if they do not get the toy immediately. I'm sure not all are like that but many I have seen are.
Even as we age, we will carry on this impulse buying habit, we want that new phone immediately, we want that new 50 inch flat screen immediately or we want that new car immediately. I feel that this is a habit we have to change if we want to cultivate the habit of savings.
However, should we find ourselves unable to control our urges, there is a way that might help. Yes, you guessed it.. AUTOMATE YOUR SAVINGS. What I am trying to say is that, say you get your pay on the last day of the month. You have to set up an automatic giro that transfers a percentage of your pay on the 1st of every month to a separate savings account which you do not touch for anything other than investments.
The percentage can be any number you decide on. You can start small and slowly increase as your pay increases or expenses decrease. Or you can just bite the bullet and put in a big percentage so you will have no choice but to reduce your spending. Personally, i prefer the latter but as always, the wife disagrees and chooses the former. Those who are single would not have an issue with conflicting interest. Anyway, to compromise, we settled on the former but agree to cut down our expenses whenever we could...(so she says.)
The reason why automating your savings help, i guess, its because what we do not see don't hurt us. Technically speaking, this has been the way since we started working. What am i talking about? CPF! We have been automatically 'Paying ourselves first' since we started working. At first we all grumble a little, but we get used to it and get on with life with whats left of our pay. So why not take that a step further and take another portion of your salary and automate it into your savings account?
We will grumble at first, but as human, we adapt and get on with life while growing and feeding your savings and investment account. The reward being one day, this 'pet' of yours will grow big and strong enough to pay you back for your years of supporting it.. thus enabling you...RETIREMENT.
I know what I have said has been said many times before, but it's always good to refresh and remind. I hope that this piece of advice will help you in your savings journey.
As always, save more, spend less and invest wisely.
P.