Psychology of Saving: Overcome Every Challenge

If saving money isn’t easy for you, you’re not alone. It’s not uncommon for people to struggle with putting money aside, and a variety of reasons are to blame.

Most people — 38% — claim their biggest roadblock toward saving is not earning enough money, according to a recent GOBankingRates survey. Others — 22% — said having expensive bills makes it hard to put money aside.

Financial obligations can certainly make it hard to save money, but psychological reasons also frequently come into play.

“Money management, specifically the ability to save, remains a significant challenge for many,” said Ryan Sultán, MD, assistant professor of clinical psychiatry in the Department of Psychiatry at Columbia University Irving Medical Center/New York State Psychiatric Institute. “The complexities behind this struggle extend beyond mere mathematics, delving deep into human psychology.”

Here’s a look at 10 common psychological challenges people face when trying to save money, and how to overcome them.

Instant Gratification

“Humans are evolutionarily wired for immediate rewards,” Sultán said. “In the context of money, this can manifest as impulsive spending, choosing short-term pleasures over long-term benefits.”

To combat this, he recommended implementing the 48-hour rule on spending.

“Non-essential purchases are delayed by two days, [which] can help curb impulse buys, giving time to reflect on the necessity of the purchase,” he said.

Social Comparisons

“The need to ‘keep up with the Joneses’ is heightened in the age of social media, where everyone’s life, including their purchases, are on display,” said Sultán. “This can lead to spending beyond one’s means to fit a particular image or social expectation.”

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The good news is, you can overcome this challenge.

“Limit exposure to social media and cultivate gratitude for what you have,” he said. “Recognizing and valuing personal financial goals over societal pressures can offer clarity.”

Financial Illiteracy

“A lack of education about financial management, budgeting and saving can lead to poor money decisions,” Sultán said.

Avoid this by educating yourself.

“Seek out resources on financial literacy,” he continued. “Many online platforms, books and community courses offer foundational guidance on money management.”

Psychological Anchoring

Sultán said, “Anchoring is a cognitive bias where individuals rely heavily on the first piece of information encountered — the anchor — when making decisions. If one grows up in a spending-centric environment, it can become their financial norm.”

He said you can overcome this challenge by consciously reevaluating and redefining your personal financial beliefs.

“Engage with diverse financial philosophies and adapt a mindset anchored in savings,” he said.

Avoidance and Denial

“Money, for many, is a source of anxiety,” Sultán said. “This can lead to avoidance behaviors, where individuals steer clear of addressing their financial realities, exacerbating the problem.”

The key to changing this habit is starting with small steps, he said.

“Regularly check bank statements, create basic budgets or even engage in financial therapy to address deeply rooted money anxieties,” he said.

Fear of Missing Out

“The desire to be part of experiences, often spurred by peer activities or societal trends, can lead to overspending,” Sultán said.

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This is often referred to as FOMO.

“Prioritize personal financial health over transient trends,” he advised. “It’s essential to recognize that true experiences are often priceless and aren’t always tied to monetary expenditures.”

Emotional Spending

“Emotions significantly influence our spending habits,” said Dr. R.Y. Langham, a psychologist specializing in obsessive compulsive disorder at Impulse Therapy, an online course. “Some people shop to alleviate feelings of sadness, stress or even boredom.”

If you notice this pattern in yourself, she said you can try to determine the triggers that lead to this behavior.

Once you’ve identified them, you can work on establishing healthier coping mechanisms,” she said.

Not Thinking About the Future

Some people often misjudge their future needs, thinking retirement or other life events are too far away to be of concern now, Langham said.

“However, the future has a funny way of arriving much faster than we anticipate,” she said. “Visualizing your future needs and consulting with a financial planner can offer valuable guidance.”

Resistance to Change

“Most people have a hard time changing their lifestyle in order to start saving more,” said Kamran Eshtehardi, Ph.D., a clinical psychologist at Kamran Psychology, Inc., in Pasadena, California.

He said there can be many reasons behind a resistance to change.

“They may have unhealthy money beliefs or feel pressured to maintain a certain lifestyle, because of social influences and comparisons,” he said. “These issues, again, require that we reflect on our thoughts and beliefs as a way to develop more insight.”

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Ultimately, he said you need to get in touch with your beliefs around money or desire to fit in socially to determine whether those beliefs are useful to you.

“Doing so can open the door to change,” he said.

Life Experience

“Some people have difficulty saving money because their life experiences have led them to believe that saving is impossible or pointless,” said Leah Foster, LCSW, JD is a psychotherapist with a private practice in New Orleans.

“Someone who grew up without any information about how to save money may not know the best way to save and may become frustrated and give up.”

On the other hand, she said someone who grew up with money, might not see the point in saving or understand optimal ways to do so, because they’ve never been in this position.

“The best way to overcome this is to reflect on your beliefs about money and the role it plays in your life,” she said.

For example, she said to ask yourself where you learned this belief and if it’s true.

“Then reflect on what role you would like money to have in your life and make a list of specific items or experiences you are saving money for,” she said.

Additionally, she said it can be helpful to talk to people who are in a different financial situation from your own to find out how they’ve navigated tough times and what they do when they have a little extra money.

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