f to work until you die. This merely contributes to the cycle of anxiety that accompanies the “living paycheck to paycheck” reality.
How to Pay Yourself First
Dr. Mullainathan is a huge proponent of automation when it comes to saving because it makes “paying yourself first,” a literal no brainer. And, in the age of internet banking, doing this is easier than ever.
But wait! What if, like I mentioned before, you need that money? To that, I ask, what would happen if your hours got cut at work, or you got laid off, or even if your healthcare premiums got higher? You would have to figure out a way around it, right?
Well, that’s exactly what you need to pretend is happening now.
The good news is that you don’t need to make changes as drastic as those “real” things right away. In fact, it is best to start small. Even saving $25 a paycheck adds up nicely over time.
Learning to save, especially in such small amounts, is a little like jumping into a cold pool. Once you do it the first time, you are ready to go again because it doesn’t seem so harsh.
One easy way to do this is to use modern banking to your advantage. If you are paid every other Friday, have an automatic transfer to your savings account set for every other Friday.
Start small, then, gradually increase the amount. Work out a schedule. Say, every 3-6 months you alter the amount incrementally. So start with $25 and then raise it to $50, to $75, etc. This is the same method used by many companies and marketing firms to get your business and make money off your account.
They offer you a service for free or for a low price for the initial few cycles. Then, they start to charge you, sometimes more and more, through an automated pay system (like a credit card) and you don’t notice.
We’ve all gotten sucked in by these methods. Why not use them to benefit us instead?
Counting Your Financial Blessings
I’m going to fall back on an old cliché because I think it’s especially valid in this case. It is easy to face the “problems” of the now when you also focus on the benefits of the now. That means counting your blessings, practicing daily gratitude for what you do have financially and otherwise, no matter how small.
Verbalizing gratitude is an exercise I do with my two young daughters every night. We are never allowed to “repeat” the same gratitude twice, which challenges us to find the joy in the mundane and refocuses our “Scarcity of Attention” onto the good, rather than the bad or stressful aspects of each day.
For example, last night I made apple muffins from a new recipe I got through email. They were really tasty, but also a complete mess. Totally not worth my time and effort. You know what I was grateful for, though? Having the time to make the muffins in the first place.
I think it’s time that we all start to look at our finances that way. It is time to use the Scarcity of Attention to refocus on what we do have and make more with less.
How do you make saving easy?