The Psychology of Saving

In a perfect world, we can set a budget that is completely practical. We stick to only spending on our essential expenses, limit spending on frivolous items, and have inspiring savings goals that we make steady progress towards. In the real world, things may not go according to plan, and we aren’t always able to (or don’t want to) follow a budget perfectly. 

For example, there are times when simply dining at a restaurant with friends can be essential to our well-being if it makes you feel connected, enjoy yourself, and the anticipation of weekend plans gives you something to look forward to.

There are also times when purchasing something that you don’t necessarily need, but you really want is a great way to treat yourself. You choose to give yourself something that makes your life better in some way (even if just for its usefulness), or that you just simply enjoy.

Of course, you could reach your savings goals quicker if you didn’t choose to indulge in these little extras. To stay on track with a budget and get ahead in life you do need to be sensible with your spending. But all work and no play is not only unsustainable, but it may actually make it difficult to achieve your savings goals in the long term.


The truth is counterintuitive 

If all you are doing is working, saving, and placing restrictions on yourself, you may be sabotaging your ability to manage your finances successfully. Why? Because the more deprived we feel, the more likely we are to abandon the course of action making us feel that way. When you have a sense that you are living in a state of abundance, the opposite can occur.

The trick is to redefine what abundance means to you. Let’s use the example of savouring a really good barista-quality coffee. This may be a simple pleasure that adds value and pleasure to your day.

If abundance means not having to worry about money and having money set aside that is dedicated to enjoyment, then you can make this happen too. Automate your bills. Set a sensible budget that gives you a set amount of spending money that you will feel comfortable with.

Limiting yourself too much with an impractical budget, and then feeling disappointed with yourself for being unable to stick to it, is an unpleasant cycle for many. Instead, being a little more generous with expendable income allowances, and slightly reducing your savings contributions, can set you up for success. Saving a little bit less every week or month, but being able to sustain this spending behaviour long term is a far better alternative than setting unrealistic budget goals and then constantly deviating from them.

What does abundance mean to you?


Understanding why you are saving, why you are budgeting, and what moments of happiness you can get out of life, that also fits in with your ideals of abundance can be a very successful strategy. If you are struggling with sticking to your budget, check-in with whether there’s a possibility that you are being too restrictive, your spending money isn’t being directed at activities or experiences that are truly making you feel happy, or your savings goals aren’t in alignment with your values.

Love to travel? Then travel may be a worthwhile goal for you. Love to learn? Then studying may be a worthwhile goal for you. Adore entertaining at home? Then renovating may be a worthwhile goal for you. Love spending time with your family? Then reducing the hours you need to spend at work may be a worthwhile goal for you.

What’s most important to you? What makes you happiest? When do you feel the most fulfilled?

You might just find that when this matches up with your savings goal, it’s so much easier to feel motivated to get there.