Even a cursory look at American culture would likely reveal that people here are dreadfully poor savers of money for retirement or rainy days. Furthermore, the average American has saved exactly zero dollars for retirement, proving that Americans are not particularly good savers. Nevertheless, there exist nations where individuals excel in this area even more.
For example, you may assume the Danes are terrific because they are all Scandinavian and so forth, but in fact, their household savings rate is negative. Saving money is another area in which the Japanese excel. Americans are not the worst, but we do belong in the lower echelons of the competition.
Nevertheless, if a $500 emergency arose today, two out of every three Americans would not be able to pay for it.
That’s not very good.
There are several reasons why so many individuals struggle with saving money, and today we’ll focus on a few of the more significant ones.
Human civilization is still in its infancy when it comes to evolutionary terms. Not even a young child. The concept of organized civilization, and specifically an organized financial system, is very new. They therefore conflict with our nature.
Not grasping hold of everything in your line of sight meant losing it during our species’ evolutionary path to our current state. It just didn’t make sense to save money for later, or at the very least, it made less sense than eating everything at once.
This explains why rapid satisfaction feels so good because of the way our nature is designed. It’s not that good, which is the issue. Not being able to save money actually doesn’t even rate in the top three issues that it can cause.
Put another way, it is just not in our nature to save money, and doing so would require us to go against thousands and thousands of years of evolutionary history.
That’s not an easy task.
The Most Adverse System
The bulk of the financial system in the developed world (and elsewhere) is designed to benefit the wealthy, and the author does not intend to come across as one of those conspiracy theorists. This is due to the fact that they decide on 99.9% of the matters that affect the financial system and the countless systems that regulate it.
For instance, interest rates on personal savings accounts were slashed to far under 1% during the 2008 Financial Crisis, and they are still far lower than the 3% or higher that they were before the entire crisis.
This is just one example of how those who are less wealthy have suffered more than those who are wealthier after an incident that was, unfortunately, brought on by those very wealthy individuals.
The chances are still stacked against you even if you follow the appropriate course of action and transfer your funds from your checking account to your savings account, avoiding the alluring, spend-friendly layover time.
Furthermore, our consumer society—which depends on people spending money—is the reason we exist in it. The benefits of spending are continually emphasized to you, both directly and indirectly. Once more, the atmosphere encourages spending rather than saving money.
Furthermore, if you attempt to “hack” this environment in a radical way, you may end up in legal situations that you will need the knowledge of litigation assistance services to resolve.
Insufficient Knowledge
CNBC reported a piece last year on how the school system was failing, at least in terms of individual financial management and broad economics. Specifically, kids in the US aren’t taught how to manage their finances or how to use money responsibly or in a way that will last into the future.
With the internet and a wealth of information that does not need to come from schools, it might not seem like a big deal in today’s environment. The only issue with this is that it’s indiscriminate information, and young people (and older people too) may find it hard to distinguish between sales pitches and wise counsel like what Distilled Dollar offers, for instance.
It’s Challenged
All of this boils down to one very basic fact, which combines all of the previously described factors and much more: conserving money is hard. It takes a great deal of forbearance, extensive preparation, extreme self-control, and the determination to refuse doing things the majority of the time.
A significant portion of the populace finds that the obstacles are insurmountable. They continue doing the same old thing and spending everything they have plus a little extra.
Be more astute than that.
Put in a lot of effort.
Acquire knowledge. Conserve.
