Why We Have Such a Hard Time Saving for the Future
Our brains aren't wired to think long-term
According to several scientific studies, our brains aren't capable of painting a clear picture of our future. We have an incredibly difficult time imagining ourselves at 75 years old. There are too many unknowns, and plus that would require us to think about our own mortality (GAHHHH NOOOO). Our brain shields us from having to do this. We only like to think about our near future: Where we're going on vacation next summer, where we're going for dinner and drinks this weekend. This inability to think long-term affects our saving habits. Because we can't picture the future, we are less likely to save enough for it. The concept of our old age just seems like an abstract possibility right now.
We crave instant gratification
I blame technology for this one. Remember the days when you'd have to wait a full 3 minutes before your dial-up Internet connection brought you to America Online? Can you imagine doing that now? Absolutely not. If a website takes more than a millisecond to load I freak and X out of it.
The speed in which we live our lives has made us infuriatingly impatient. We demand instant gratification for EVERYTHING. We can't even watch shows once a week now. We demand entire seasons be released so we can spend 10 hours on a Saturday binging them.
Of course this doesn't bode well for our saving habits. Because saving for the future requires us to delay gratification, we neglect to do it. We want to spend now. We want to see the fruits of our labor now. Saving for the future requires us to fight against our own neurological inclinations.
We forget the importance of time
Time is your best friend when it comes to building wealth, but we squander this precious resource. We put off until tomorrow what we really should've done yesterday. Laziness and fear are so deeply ingrained in us that we use procrastination as an excuse to avoid doing the right thing financially.
Time is both working for and against us. We think we have so much of it, and we do, so instead of starting a savings plan today, we put it off until tomorrow because, well, we've got time.
If you started today, over the course of time you would build up significantly more than if you keep putting it off.
We don't know how to prioritize or automate our finances
I get it, finances are overwhelming, but it doesn't have to be that way! If you aren't sure how to prioritize your financial life or automate your finances, all it takes is a little research and reading to figure it out!
Ummm have you read my new financial guide yet? I will help you get your financial life in order! It won't take you more than a few hours to read either, because as you know, I have the attention span of a distracted goldfish.
We make excuses
Again we're prone to procrastination, laziness, and feeling overwhelmed and this all leads to the creation of excuses. But, oh shit, all of a sudden we're 50 years old and have nothing to show for it and panic sets in.
What are excuses exactly? An excuse is nothing more than a mental block we create for ourselves. They aren't real, but they do have very real consequences. An excuse is nothing more than a decision you've made and you absolutely can reverse that decision.
So what's the answer?
(THIS COULD BE YOU IF YOU START SAVING NOW...LOOK AT THOSE TOTALLY REAL SMILES)
What can we do to fight against our lazy short-term minds?! Here are a few ideas:
Automate as much of your financial life as possible. Automation is your friend. Take one day to set up automatic allocations to your bills, savings goals, investing goals, and debt repayment. Set and sort of forget it. Automation forces you to do the right thing, and you won't even have to think about it! For more on automating your finances read this book.
Reverse budgeting is a concept gaining popularity. Basically, this is a pay-yourself-first form of budgeting. You'll automatically allocate your paycheck to your savings/investing and debt repayment goals FIRST, and then whatever is leftover you can spend as you see fit. I think it's actually a simpler strategy than traditional budgeting. For more on reverse budgeting read this article.
Get 1% better every day. The author and podcaster James Altucher talks a lot about constant improvement. You don't have to become a money genius overnight --just make yourself 1% better each day. Read a financial article. Practice your negotiating skills. Automate your checking account. Here's how to get 1% better every day.