In Focus – SCCCU Blog

We all want to save more. But the truth is that saving money is hard, and many of us struggle with it. A recent survey from NerdWallet shows that less than half (45%) of Americans would be able to cover a $1,000 emergency expense without turning to a credit card or loan. In other words, we need to start saving more.

What’s holding you back from becoming a better saver? According to Bankrate, in 2024, 63% of adults say that inflation is the main roadblock on the path to putting more money away. For others, it can be a simple case of not earning enough — and that’s especially true for those just starting in careers (and earning very little) or people who have recently experienced a job loss and are trying to stay afloat. Other times though, there’s more to our inability to save than meets the eye. We might have mental blocks that we aren’t even aware of that are pushing us to spend, or holding us back from saving as much as we could. Let's take a look at a few mental blocks you may experience and how to overcome them.

Temporal Discounting

Whether it’s buying a new handbag or heading out for a fancy dinner, we’ve all experienced the temporary high that comes with splurging on something now rather than saving money for the future. It even has a fancy name: “temporal discounting.” This occurs when we prioritize spending on things or experiences that will provide us with satisfaction ASAP, instead of saving for a bigger goal in the future that’s more difficult to visualize. Unfortunately, this is how we’re wired as human beings.

"The human brain is set up to focus more on immediate rewards than rewards that could happen in the future," says financial therapist Amanda Clayman. "We have a real preference for anything that’s going to give us that reward feeling in the immediate term versus the long term.”

The trick to overcoming this instinct? Prioritizing “future you.” Yes, it’s hard — especially when we have so much that we want now. But this is where our goals come into play. When we make saving for retirement, a house, or a car part of our daily lives, then we’re much more likely to succeed in actually achieving those goals. The next time you’re tempted by an impulse buy, take a 24-hour pause before you pull the trigger, and spend that time reflecting on all the bigger financial goals you want to accomplish this year. Chances are, you may realize you don’t really need that new thing after all.

Not Knowing Your “Why”

Why do you want to save more money? Why are you passionate about having more money in your bank account at the end of every month? If you don’t have an answer, this could be the very thing holding you back from saving more. “Many have no ‘why’ when it comes to saving,” says certified financial planner and money coach Jenny Whichello. “Saving is something they know they ‘should’ do, but without meaningful goals, they simply don’t take the steps to get started, or they never build and sustain momentum to see it through.” In other words, when your “why” isn’t front and center in your mind, it’s a lot easier to spend and not save for the future, whether that be for retirement, your child’s college education, a new home, or other long-term goals. The best way you can save more is by keeping your eyes on the prize. When you identify exactly what your prize is, the hardest part is over.

The Issue of Competing Problems

How many times has this happened to you? You start out the month planning to save more money, but then the car breaks down, and you have to get an emergency repair. Or your friend's birthday dinner costs more than you expected. Or you find yourself working fewer hours because your child got sick.

Far too often, we find ourselves just putting out the financial fire that’s burning the fastest without thinking things through, or what is referred to as "reactivity mode," and it can be deadly for our bottom line, Clayman says. When we’re only able to take care of what’s immediately in front of us, we lose our ability to adapt to and respond to long-term challenges.

One of the best ways we can set ourselves up for success is by saving a little at a time. Even in a month when we have financial problems to solve, we can still find space to set aside $20 into our savings account. Then, before we know it, a little emergency cushion will be there for us when we need it, and we can start putting more money aside for our bigger life goals.

Your Money Beliefs (Known and Unkown) 

Whether we know it or not, we all have beliefs about our ability and “worthiness” when it comes to saving money, Whichello says. For some people, “it could be that they've tried to save in the past, failed, and now they hold a core belief that they just can't do it because they're lacking in some way,” she says.

For example, we may not feel we have the financial knowledge, skills, or commitment to be “good” at saving due to money beliefs that may have formed at a young age. This can be common among individuals who grew up in a household where the family lived paycheck-to-paycheck or where money was scarce. “Their subconscious mind is programmed to believe saving and building wealth is for people who were born into affluent families and not them,” Whichello says. But this couldn’t be further from the truth. We are all writing our own story with money, every single day. No matter how money was treated in the home where we grew up, we have a chance to make our future one that’s successful and financially empowered.

How to Become the Ultimate Saver

While our mental blocks can stall our savings goals, there are always ways to overcome them. For most, breaking mental barriers to saving starts with being honest about where your money is going. “That’s the place from which we actually gain access to a lot more levers of being able to change and adjust our choices and change and adjust our behaviors,” says Clayman. “That really starts with just being cashflow aware.” In other words, we all need to gain a basic understanding of the money we have coming in, and the money we have going out.

“Visioning” is another tactic to prevent mental speed bumps from turning into full-blown roadblocks. This involves getting clarity about all your goals and devising a real plan for getting there. In other words, we can’t just have a goal to “save more.” Instead, we should have a clear and defined goal to save $200 every month, to put towards the cost of that beautiful new car we’ve been eyeing. Having a vision for exactly what we want to achieve will help us reach our goals.

We also need to pay attention to our “stress cues” that may inspire us to react too quickly when a financial emergency arises, Clayman says. Once we know our stress cues, we can take a step back, take a deep breath, and give ourselves time to respond appropriately without reacting from a place of panic.

For many, overcoming the mental barriers to becoming a better saver is a lifelong process. One of the most helpful tools in our kit, according to Clayman, is having a support system (like our family and friends!) and being more willing to talk openly about money and the way you handle it. “The social taboos that we have around money take away one of our biggest resources that can help us be our best selves,” she says. It’s only when we can talk openly about money with people we trust that we really start to see a positive shift in our emotional lives with money.