Even though our generation is blessed with so much more in terms of comfortable homes, more possessions and having everything at our fingertips, somehow when it comes to our actual bank balances, we seem to have little left to spare. In fact, we often find that our savings are slowly dwindling despite our best efforts not to splurge. What’s causing this and what can we do about it?
Ease of Digital Payment and Online Shopping
One moment you’re looking at your friend’s Instastory, the next moment you see an advertisement of a pair of shoes that just launched. With 2 taps on your phone and a 3-second face ID check, your phone *bings* and your brand new shoes are on their way to you. Just like that. You didn’t even have to change out of your pyjamas.
There are two things happening here – the ability to shop on the very platforms you use for social interaction, and the ability to pay almost as quickly as you blink. When you combine these two phenomena you get the perfect recipe for mindless shopping.
We often don’t feel the pinch of spending when we pay digitally, as compared to taking $100 out of our wallets. That’s why it’s so much easier to spend when all you need to do is tap a card or your phone. It’s especially harder to resist spending when your guard isn’t up and the advertisement is right in the palm of your hands.
We often don’t feel the pinch of spending when we pay digitally
What’s the solution? It’s easier said than done but plan for your spending so you don’t give in to your whims in the moment. Half the battle is awareness and if you’re reading this then you’re already halfway there! Whenever I see an advertisement for an item I like, I add it to my shopping list in the Notes app. At the end of the week I take a look at this shopping list and prioritise which items I need or want more. I choose to buy some items over others and make sure that it’s within my shopping budget for that month. If it exceeds my budget, then i’d have to wait till the next month.
This practice allows us to shop mindfully and spend on the things we actually want more, without overspending. You can read more about some ways to avoid overspending here.
The pressures of constantly living an Instagram-worthy life
We can’t ignore the fact that with social media, and the constant documentation of our lives, there’s a pressure to live an Instagrammable lifestyle. From expensive cafes to long haul trips right down to extravagant weddings, the list goes on and our wallets bear the brunt of it.
While the pressures of social media is a complex issue that we won’t get into now, one small step we can take is to be more reflective before we make plans. Ask yourself – is this important to me or am I doing it to impress others? If you didn’t post your Saturday on social media, would you really have wanted to get the $18 avocado toast or would you have been happier eating a $3 noodle from the food court?
Of course some days avocado toast may win and that’s fine too, but the exercise of reflecting on our decisions helps to break the habit of doing things to impress others. Just be sure to find some ways of balancing between eating out and saving money.
Don’t use money you don’t have to impress people who don’t actually matter to you.
It’s also helpful to extend this practice of reflection to the bigger ticket items in your life like your wedding or future home. As you do this, you’ll find that you’re taking small steps to living a life you actually want for yourself and hopefully you’ll find that you end up saving more along the way.
Someone wise once said: don’t use money you don’t have to impress people who don’t actually matter to you.
Having philosophical but not actual budgets
In the generations before us, lifestyles weren’t so complex. Budgeting was a little simpler. Today, we have multiple expenses both recurring and one offs. This leaves many of us with what I call philosophical budgets – the vague idea of a budget in mind. What actually helps us to stick to budgets is to write or type them out in detail.
You want to break down your spending into categories as it’ll help you to prioritize your spending more. For example your budget could include the following: Electricity & Home Bills, Mobile/Internet, Insurance, Gym, Transport, Shopping, Birthdays, Food, Grocery, Donation. The Planner Bee app has a great budgeting function so you can keep track of your spending.
If you plan to cut down your spending, do it slowly and not drastically. Your aim is to sustainably save more, not to deprive yourself and overhaul your lifestyle. The budget needs to be realistic or we risk ditching it completely.
In your monthly budget, remember to plan for spending on holidays and friend’s birthdays. These are the items we tend to spend our savings on. If we instead plan for them, our savings have a fighting chance of growing.
Planning for spending goals gives our savings a chance to grow
Keep your budget somewhere easily accessible on your phone so you can keep track. Don’t overdo this, of course. You don’t have to document every dollar you spend but having a healthy knowledge of your budget and making decisions accordingly will make a huge difference.
While our generation has its challenges that can restrict our ability to save, we can adopt some mindfulness, reflective thinking and proactive approaches to managing our finances. In adopting these habits, we can reverse the fate of an empty bank balance.