Why Is Saving Money So Hard?

Why is saving money so difficult? In this episode of the Building Us podcast, co-hosts Erik Garcia, CFP®, and Dr. Matt Morris, LPC, LMFT ask a handful of people about how difficult it is for them to save money, and Erik shares the significance of saving money.

Episode Highlights:

  • Matt shares that the significance of taking time to be grateful and appreciative of all the things that are good in our lives, at this moment, and one of the best aspects that we can give each other this holiday season, is appreciation. (2:27)
  • Erik shares that he’s trying to be intentional about looking for something every day to be grateful for it and looking for opportunities in 2020. Because we’ve been dictated so much by today’s outside forces. (3:01)
  • Erik mentions the one lesson that his father always shared that it still resonates with him. (8:36)
  • Erik shares that sometimes, saving is used interchangeably with the idea of investing. The idea of saving is putting something away in a safe place to be used at another time. On the other hand, investing is saving with the expectation to make more money. (12:42)
  • Matt mentions that putting money in a piggy bank is not an investment. (14:34)
  • Erik mentions that when he first wrote his e-book, he talked about the three types of savings: short term, midterm, and long term savings. (15:41)
  • Erik mentions that as a general rule of thumb, three to six times your expenses, of what it costs you to live is what you should have in a short term account. (19:32)
  • Matt mentions that behavioral finance is an understanding that we’re not robots, that we do things based on emotion, we do things based on preconditions, assumptions, and history. (22:29)
  • Matt shares that If you’re saying yes to saving the money, you’re saying no to something else, and saying no is essential. But also, being aware of both sides of the equation is significant. (25:34)
  • Matt mentions one reason that saving is very difficult is because of the opportunity costs.
  • Erik mentions that financial planning is all about understanding what your values are,  and what’s vital to you. (30:04)
  • Matt shares another reason why saving is difficult for people is because of the right skill sets to do it and proper money management. (30:57)
  • Matt shares that saving is not equally easy for everyone. Because not everyone has the same income, and there’s a limit on how much you can save if your income is beneath your living expenses or right at your living expenses. (37:04)

Key Quotes:

  • “It’s hard to say because it’s so easy to spend and something like a piggy bank makes it a little harder to spend. You have to open the piggy bank, you have to extract the money. it’s not as easy just to spend it.” – Dr. Matt Morris
  • “I am a coffee drinker. I love coffee. I’m not telling anyone right now to not drink coffee, I think it’s just something that we have to be aware of when we spend, it’s robbing us of the ability to do something else with that money, that opportunity costs which could be saving. So if we’re not saving, and we have a lot of these habits of buying little small things regularly over time, it costs us a lot of money.” – Erik Garcia
  • “Saving is a skill, and the only way sometimes to get better at a skill is to practice it.” – Erik Garcia
  • “We’re not advocating not spending just to save. What I advocate all the time is to spend money in a way that’s aligned with what’s important to you, that’s aligned with your values.” – Erik Garcia

Resources Mentioned:

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