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Why is Saving So Hard?

by J. Money on Monday, December 2, 2013

attention chien bizarre

According to this article I just read in Money mag, it’s due to “scarcity of attention.” Which is a fancy way of saying “we think of the now, rather than the later.” Here’s a clip:

“There’s a popular image of people who don’t save for the future as lacking in self-control. But the reason saving is so hard has less to do with self-control and more to do with a scarcity of attention. If you have urgent current expenses to cover, then future priorities like college and retirement fall off your radar because they are simply less pressing. Scarcity of attention prevents us from seeing what’s really important.”

It’s an article by a behavioral economist, and while I agree for the most part, I’d imagine these “urgent current expenses” seem pretty important too, haha… there may not BE a tomorrow if you can’t find enough money to eat, sleep, etc ;) And plus, not everyone truly *wants* to save save save either – a pretty important variable not to be overlooked. But I do get his point in the general scheme of things – you gotta find ways to save for the future even though it doesn’t seem like a priority right now.

The article then goes on to give tips on how you can improve this:

  • Start automating your savings (so you don’t have to think about it)
  • Start investing in target-date funds (so you don’t have to think about this either)
  • And, my favorite, set up future reminders to yourself! He mentions a site called FutureMe.org which I guess lets you write an email to yourself to be delivered at a later date, haha… That way you can keep an eye out on yourself :) According to a study he’s done, those who set regular reminders save on average 6% more than those who don’t, and those who then add PICTURES to these reminders save an even higher amount at 16% more. Interesting stuff…

(This behavioral economist, btw, is a guy named Sendhil Mullainathan who just put out a book called Scarcity: Why Having Too Little Means So Much. In case you like what you’re seeing here.)

All things that are fine and dandy really – nothing new (except for the cool reminder site) – but of course this scarcity issue is just ONE of the problems in the general scheme of things, as well as the self-control stuff. I don’t think you can whittle down the problem of savings to just one thing though, but I’m certainly no economist. What about:

  • Spending more than you make?
  • Not having a budget?
  • Not KNOWING  how to budget, manage your money?
  • Not bringing home enough income?
  • And my favorite, not *caring* about the future like my friend whom I recently mentioned?

There are a ton of reasons saving is hard if you ask me. But first, you have to really *WANT* something in order to start making progress. Just like with losing weight or stopping smoking, drinking, etc. If you don’t want it bad enough, you’ll never start implementing the changes needing to get you to that next level – despite you understanding what’s best for yourself.

While I can’t speak about weight loss or smoking personally, I can tell you all about my experience with money. And if you look at this timeline here below, it’s really about the *LACK* of experience since I simply didn’t care that much – even though I knew it was important.

  • College days: Just wanted to party and have fun!
  • After graduating: Wanted my own place to live and my own stuff
  • A few years later: Wanted bigger and better stuff!
  • A few years after that: Just wanted to woo the pants off my then-girlfriend (literally!) ;)
  • And then, finally, I started caring about the future of my money and now here we are

It was only at this point of *REALLY WANTING IT* that I started implementing changes to save more and invest into retirement, etc. If you had tried to force me into it earlier, I simply wouldn’t have paid attention to you much – unless it directly affected one of those goals of mine on that list (“You’re gonna teach  me how to budget by giving me beer? Okay!” “What’s that girlfriend? You’ll let me sleep over if we go over your savings plan? DONE!” :)).

So anyways, yes, scarcity of attention is a variable, but so is really wanting something too. It’s not so black and white unfortunately. The trick is figuring out which of these obstacles are standing in our way ONCE we’re ready to start taking action, and then get to wiping them away as fast as possible. There’s two sets to the equation – the “why” and the “how.” And for all of you reading this right now, you’re in the “how” boat since you obviously already care about your money being here :)

So keep on pushing forward with those goals, everyone! If you’ve found any tricks that help you to save or invest more, please let us know in the comments so the rest of us can learn from them too. As our good friend G. I. Joe used to say back in the day, “Knowing is half the battle!”

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Photo by Newtown grafitti… Do you know what “Chien Bizarre” means? ;)


{ 42 comments… read them below or add one }

1 Snarkfinance December 2, 2013 at 6:52 am

I think that you are right in stating that it starts with goal setting… however I think all of the “what abouts” listed fall into the issue of attention scarcity in that it is the primary factor preventing those who have trouble budgeting, saving and so on from changing their ways. For example, one probably doesn’t know how to budget because they aren’t thinking of the reason to learn, which is to better be able to plan for the future.

I think there needs to be a balance between living in the now and planning for the future. Regardless of how much we make or save, this is a continued struggle.

Great post!

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2 Jane Savers @ Solving The Money Puzzle December 2, 2013 at 7:45 am

Spending is so easy and fixes all of the short term problems that you have (I’m hungry, I’m tired, I’m bored).

Saving is hard. I just worked 7 days in a row and it would have been so easy to crash on the couch and dial for pizza because my brain was so fried and my legs so tired I could barely move or think. Luckily I am trying to save and that won out over the desire to spend to fix my problems and I made some supper.

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3 J. Money December 2, 2013 at 12:00 pm

SO TRUE!!! Spending is too damn easy :)

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4 Alicia @ Financial Diffraction December 2, 2013 at 8:20 am

Yeah, I definitely agree with Jane – spending money is a short-term fix for so many issues. Yesterday I ended up cooking two full meals, served them into individual serving sizes, and now I don’t have an excuse for not taking a balanced lunch to work, or if dinner doesn’t get made one night we still have the equivalent of a healthy frozen dinner. Otherwise, I could easily spend $25 a day on junky-food… but to make two full meals with easily 10 servings, it cost me around $25.

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5 Holly@ClubThrifty December 2, 2013 at 8:24 am

I like the idea of sending emails to my future self. I might try that =)

I dunno about the “scarcity of attention” thing though. I have friends who spend all of their money on crazy things you would never think of. Then they don’t have money to fix their car or washer when it breaks. And these are people that make 100K!

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6 J. Money December 2, 2013 at 12:01 pm

Ouch…. I feel some judgements coming on so I’m gonna leave before I vomit them out! ;)

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7 Laurie @thefrugalfarmer December 2, 2013 at 8:29 am

All the “what abouts” can be handled if you really WANT something. We had excuses for years about why we were in debt and never had any cash. When we finally really wanted financial freedom, we chose to take a good, honest look in the mirror, and fix those “what abouts” or simple throw them away (as in, “What about cable TV?”), and focus on doing what was right for us long-term.

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8 Brian@ Debt Discipline December 2, 2013 at 8:32 am

I think it’s about balance. I’m not saving any money right now, because my immediate need to to pay off debt. Once complete, that will shift and I will begin saving more. Having a plan, a goal, budget etc sets you up for success. If you just blindly spend money each day you’ll never get ahead.

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9 John S @ Frugal Rules December 2, 2013 at 9:24 am

I hadn’t heard about that website, it sounds pretty cool. That said, I could not agree more with the need to truly want something in order to really start attacking it. I know it was that way for me when I started paying off my debt years ago. I knew it was needed, but screwed around and avoided it. It wasn’t until I wanted to have that freedom that I really started working at it and is what gave me the motivation to push on.

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10 Fig December 2, 2013 at 10:07 am

It can be hard for sure. I know a ton of people in my life that don’t save at all because they just never get around to it. They all talk about saving and want to save but they always have something else that comes up first and takes priority.

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11 Debt and the Girl December 2, 2013 at 10:34 am

I find that saving should be thought of as something you MUST do versus it being optional. I know everyone is in a different boat but you need to take your finances seriously. If you don’t, who will?

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12 J. Money December 2, 2013 at 12:05 pm

YES! Agreed. If you can force yourself to making saving a BILL, like all others, our safety nets (and sanity!) would be much better off… I should actually blog about that again – my last one was like 5 years ago on that, haha… can’t even find it on my blog anymore! ;)

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13 Deacon December 2, 2013 at 11:01 am

I think automating savings is a great idea. We do that for two of our savings funds, one for travel and the other for annual expenses. I have yet to do it for investing, but I should send an email to the “Future Me” to do that in the near future.

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14 J. Money December 2, 2013 at 12:06 pm

Also tell the Future You to buy me a beer too, will ya? ;)

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15 EL @ MoneyWatch101 December 2, 2013 at 12:03 pm

I believe saving only comes if you are a natural saver, and if you have experienced financial hardship and aka learned your lesson to not be careless with money. A major financial set back can be the trigger to change your life. One drawback that I have noticed in some folks is a temporary savings fix, then as soon as things settle they revert back to their ways.

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16 J. Money December 2, 2013 at 12:07 pm

That is true – a catastrophe helps change your life in all kinds of different ways really. Money being no exception (though I don’t wanna wish one on anyone!).

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17 H December 2, 2013 at 12:30 pm

EL, I am a saver. It comes easy to me and it makes me happy whereas spending leaves me anxious. I think it’s because I experienced poverty growing up and learned my lesson.

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18 J. Money December 3, 2013 at 8:42 am

That’s some good motivation to save! Usually what makes people happy gets them in trouble, hehe…

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19 Broke Millennial December 2, 2013 at 12:43 pm

I find it interesting how often the comparisons are drawn between being good with money and losing weight. I’m pretty solid with the former and mediocre with the latter. But, like you said. It all comes down to wanting it enough.

It’s incredibly difficult to get someone to change their money behaviors if they’re really not interested in committing. I’ve always been a saver, not sure if it’s a nature or nurture thing, so I never really identify much with folks who say it’s “hard to save.” Like the mantra goes — pay yourself first!

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20 J. Money December 3, 2013 at 8:44 am

Oh yeah. My dad for YEARS was telling me to invest in my 401(k) and I kept telling him I would over and over again until (5 years later) I actually did! Haha… only cuz I finally cared and wised up :) But the important thing is that we all DO finally start paying attention, even if it takes us a while. Cuz once we get on track there’s no stopping us, baby!

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21 Michelle December 2, 2013 at 1:49 pm

I found it very hard to save until I made it a ritual. Every Friday, I put a consistent amount of money into both my savings account and my Canadian Tax-Free Savings Account. Now I have a still-small, but growing, amount of savings that gives me such peace of mind. And I look forward to my Friday transfers.

An interesting side-effect to my newfound habit is that I can so rapidly adjust to a new bank balance from my primary (chequing) account: if there’s less in there, I simply spend less. It’s been an unexpected insight to my spending habits. I would have sworn they were carved in stone but in fact they are surprisingly flexible.

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22 J. Money December 3, 2013 at 8:47 am

YES! Love it! Whatever you have to do to get yourself to save – great tip :) Congrats.

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23 writing2reality December 2, 2013 at 2:20 pm

As Debt and the Girl mentioned, making savings mandatory instead of optional is huge. Money is oddly a funny subject in this country as we are so focused on spending (YAY Cyber Monday = Where are all me monies?), yet no one focuses on, talks about, or embraces saving and investing. If investing is talked about, people here about the latest and best stock or “get rich quick” ideas.

Fiscal accountability is tough to come by, and it hurts that our country avoids it from the top down. Our governments, local through national, typically ‘kick the can’ down the road to avoid actually addressing the problems. And who better to set the example of spending less than you take in… oh wait… ;)

Intense discussion aside, prioritizing the fundamental life changes needed are tough to come by. Most folks don’t experience life altering, and generally improving, changes until they’ve hit rock bottom. That is the point where needs race to the top and wants go out the window. Scarcity of options becomes real at that point, and the attention to what’s required hits home quickly. For those floating along without moving forward, they won’t care unless required.

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24 J. Money December 3, 2013 at 8:49 am

So are you suggesting a #SavingsSaturday or something similar one day a year?? Cuz THAT would be cool ;) Just like how today is #GivingTuesday:

http://www.budgetsaresexy.com/2013/12/hashtag-giving-tuesday/

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25 Laura @ RichmondSavers.com December 2, 2013 at 3:59 pm

It’s all about your mindset. If you can prioritize and understand that saving is something you have to do, no matter what, I think it becomes a little easier. Contributing to savings should be a non-negotiable, so it’s never a question of should I or can I (and every little bit helps, so not many excuses to not save anything, period – even $10 a month is better than $0!)

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26 Justin @ RootofGood December 2, 2013 at 6:28 pm

I went to a course called “Project Managers Boot Camp” many moons ago. It was in Chicago, so I had some overly thick pizza and I vaguely remember seeing Wrigley field at some point, public urination, and drinking lots of beer with my classmates.

Since I was slightly hung over during most of the course, I only recall one take away. The Time Usage Matrix. It’s a theory that things can be urgent or not urgent and things can be important or not important. You naturally tend to focus on the urgent tasks. They aren’t always important. The non-urgent tasks that are important tend to get neglected.

I think “saving for your future” falls in the not very urgent but extremely important category. The trick is focusing enough attention on saving for your future even though it isn’t urgent. Once it is urgent, it is too late.

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27 J. Money December 3, 2013 at 8:51 am

That’s a helluva takeaway after all that beer – I’m impressed you retained it! ;) Something good to think about for sure though, thx for sharing man.

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28 jestjack December 2, 2013 at 7:10 pm

Aaaand this is just the reason I canceled my Money mag subscription after being a faithful subscriber for years. They’ve lost their way…I want to hear about trends and the next great investment opportunity…Not some “hack” writing an article about why people don’t save….”because of scarcity of attention”…REALLY…No wonder their readership is down…

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29 J. Money December 3, 2013 at 8:59 am

I didn’t particularly mind it too much (of course, or else this post wouldn’t exist! haha…), but I do feel like it’s lost its edge for sure… Seems to only take me 30 mins or so to get through each month’s edition vs hours like it used to since I was so into the articles… Maybe it’s just us and we’ve outgrown it?

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30 jestjack December 3, 2013 at 7:44 pm

Disagree…I think they have cheapened the mag and there is no thought behind it. May just have been when the swapped out management a few years back… How about an article on who is gonna benefit from the move toward electric cars…battery makers…electronic component makers…the guys that make the high speed chargers….and who is gonna be the loser…Exon/Chevron….Jiffy lube? They used to write just such articles..that took thought and would “look” for what was around the curve. Now …not so much…I subscribed for over 25 years…truly sad…

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31 J. Money December 4, 2013 at 9:10 am

sad indeed :(

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32 Jacob December 2, 2013 at 7:38 pm

I think the rule of forced “artificial urgency” comes into play here (don’t try to search that, I just made it up). Realize that NOT saving is VERY URGENT, and know that you may NOT survive if you don’t. Now, in America, that is RARELY true because of our over-abundance, but if you convince yourself that it IS true, you may find the motivation needed to start socking away for a rainy day.

Though, don’t overdo it, or you’ll find yourself living in a bunker with piles of cash and no friends. There’s always a balance to these things :)

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33 J. Money December 3, 2013 at 9:00 am

Would you at least be able to dive into your piles of cash a lot Scrooge McDuck? Cuz that might make it worth it! ;)

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34 Christine @ ThePursuitofGreen December 3, 2013 at 12:33 am

Moving forward! Haha. It really does take more effort to save for twenty years in the future or for retirement! It takes a lot of re-working in my mind to make saving and retirement important. I’m so used to it now though that it’s a habit. I’m lucky though that I grew up with that frugal base so I got a headstart on a lot of people.

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35 Stefanie @ The Broke and Beautiful Life December 3, 2013 at 12:50 am

Agreed. You can’t do much without goals, and they have to be well defined. Big goals and little goals with all the action steps in between. Otherwise, changes just don’t seem to stick.

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36 Skint in the City December 3, 2013 at 6:01 am

I remember reading somewhere that the main thing to grasp if you want to make a success of being an adult (and of your money), is the philosophy of deferred gratification. Study now, earn more later. Ease off on designer shoes, be able to eat in your old age – that sort of thing. Not always easy . . .

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37 J. Money December 3, 2013 at 9:01 am

Def. not easy, but very true :)

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38 Debt BLAG December 3, 2013 at 12:03 pm

This is a big reason why intermediate goals are so important to me. Paying off $100,000 in debt or saving up millions for retirement both sound ridiculous when I look at them as long-term goals.

But paying off a little bit here or saving a little bit there are both easier goals to grasp and easier goals to achieve :)

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39 J. Money December 4, 2013 at 9:11 am

YES! Brilliant! A lot easier to pay off smaller chunks than large ass ones – good for you on figuring that out and rolling with it… Gotta do whatever you can to stay motivated!

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40 Mel @ brokeGIRLrich December 3, 2013 at 7:34 pm

I love the though of saving as a bill. I love my 401(k), since it comes right out of my paycheck, I don’t even register that the money is “spendable” to me. My income is the number that turns up in the checking account every other month. I wish I could do the same with IRA, but I haven’t figured out how.

I can’t even imagine the crap I would put in an email to my future self. :oP Although I did read some study once where people who saw photos of themselves aged to their 60s/70s had notably better retirement accounts after a few years compared to the control group that did not.

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41 J. Money December 4, 2013 at 9:13 am

What?? Haha… that is both weird and awesome at the same time! RE: your IRA – maybe you can just auto. transfer the money to a different savings account each month, and then at the end of the year go in and invest it all in one swoop and work your IRA that way? That would kinda sorta automate it more for ya.

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42 Blair Illiano December 10, 2013 at 10:04 pm

I guess it’s more a matter of prioritizing our goals. Saving for the future is, you know, for the future. And the future is so far away! I guess automating the process would make things much simpler for those not actively trying to save.

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