The Surprising Truth About Saving Money
Rethinking the Role of Self-Control
When it comes to saving money, many of us assume that it’s all about exercising self-control. My friend, for instance, believed that if he could just resist the urge to spend, he’d be able to save more. But I’ve always seen it differently. Despite being a terrible budgeter and having a tendency to splurge, my savings continue to grow significantly each month.
The Power of Portion Control
Saving money is a lot like eating. When we’re presented with a large plate of food, we tend to eat it all. Similarly, when we have a certain amount of money, we’ll find ways to spend it. The key is to control the portion size. By limiting the amount of money we have available to spend, we’ll naturally start to make do with what we have.
Automating Your Savings
The secret to saving lies in setting up an automated system to get the money out of our hands as quickly as possible. With technology on our side, it’s easy to automate our savings through 401k deductions, Roth IRA contributions, and microsavings apps. By doing so, we’re reducing the amount of money we have available to spend, making it easier to save without relying on self-control.
Making Your Savings Hard to Reach
Saving money is pointless if we’re just going to dip into it whenever we want to make a purchase. That’s why it’s essential to make our savings hard to access. Employer-sponsored retirement plans are a great example of how to do this. By setting up a system where our savings are out of reach, we’re less likely to touch it.
No Self-Control Required
Saving money doesn’t have to be a constant battle of willpower. By controlling our portion size, automating our savings, and making our savings hard to reach, we can trick our brains into living on less. We don’t need to force ourselves to save; we just need to set up a system that works for us.
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