Reasons Why Most People Can’t Save
As the income spikes, the urge to fit into society increases. It is not a necessity but a want. If you have an optimal savings plan and secured funds, this want would not really impact the future at all. However, this short-term happiness can rip you off your dream retirement plans. Let us understand why some people struggle to save despite earning well.
Expectation vs. Income
Once a person starts earning better, their expectations increase, too. First, you want accommodation for the family, then a car, after which you want another one just because the neighbour has two. These expectations can be a whirlpool that can drag you to the deepest spiral of expenditure. Be smart and use your money wisely by purchasing items that are needed, not to show off.
No Long-Term Savings Plan
Applying government-backed schemes like SCSS for senior citizens can heavily impact your future. One can do so as they reach the age of 60, and the senior citizen saving scheme interest rate is 8.2%, which is higher than most other long-term savings plans. If you have not reached the eligible age, try other plans, such as endowment policies.
Lack Of Financial Literacy
Being good at your job or profession does not guarantee that you are smart with money, too. Financial literacy can change your entire lifestyle and outlook on life. Educate yourself on budgeting, investing, and complex financial products. Take the help of the experts and tools for a better approach if you do not know where to start.
The Financial Stress of Debts
A stable income can entice you to take loans for unnecessary expenses, such as cars and a mortgage on a house that is beyond your budget. It can slow down your savings process and increase liabilities from all fronts. You may think you are investing your money in the right thing, but it eventually leaves you with nothing to save for the future.
Retail Therapy, Parties and Emotional Spending
Most people are dealing with mental health issues lately. Impulse buying is trendy, too. It is a coping mechanism where people would rather choose to callously use their hard-earned money to party and purchase rather than get a proactive cure for the stressful issue. This emotional spending has left the new generation with nothing but materialistic wealth.
