Why Most People Fail to Make Financial Progress

By The Accrual World on The Capital

While the idea behind personal finance is simple, many fail to put them into practice. So many people can only dream about plans to be financially successful, yet many fall short. Here are three reasons why.

Photo by Denise Jans on Unsplash

1. Instant Gratification

It’s always fun to buy something new or something you want, and the pleasure that comes with it makes you feel good. Living in an era of ‘you come first’ often carries mixed messages telling you it’s okay to splurge as you wish, stay in bed all day and eat whatever you want. You may call it self-care, but there is a fine line between self-indulgence and self-care. The new phone will now just be a part of your regular life, new clothes mixed together in your closet, latest beauty products stashed away with the rest, and games that are now hidden back in your cupboard. You may even have forgotten that purchase a week later, and the money spent leaves a hole in your pocket.

Saving money is boring and may feel like a drag, but setting good habits will compound. Our lives are made up of routines, and the good thing is that we can alter it for our own personal benefit. For instance, I have to have a cup of coffee each morning. Instead of purchasing one from a cafe on the way to work, I make my own at home and drink it while on commute (well now with lockdown things are made a lot easier). Simple tweaks can add up to real benefits, and if you keep working on it, one day you will find it to be your new normal.

2. Takes Too Damn Long

Because it can feel like you are never going to get there, so why bother trying right? Say if your goal is to get to one million dollars of net worth, and if you work backward from it and it will take you years and perhaps decades within your life. You start to lose touch with it as it becomes a goal that you will only achieve it someday. You can’t exactly tick it off your list today. Let’s be real, humans do not exactly have the most patience in doing things. The second our browser takes more than 5 seconds to load we get annoyed and frustrated. What more if a goal that could take 5 or 10 years to realise. It’s easy to walk away and to get stuck in a trap thinking that financial goals are merely dollars and cents. But it’s more than that. Shifting your life and mindset in a way that makes you feel more content can help more than you know.

3. Feeling Disconnected

With almost any goal you will always feel this big rush of initial momentum as you put thoughts into action. And once that’s all down, progress towards your financial goal tends to go on autopilot. For instance, setting up auto transfer to your savings account upon payday. It’s great when you do it consistently, but a long passive period of not doing anything can leave you feeling disconnected and easily sway away. A good way to mitigate this is to remind yourself of the bigger picture and be specific about it. Is it to buy a house, to start a business, save up for a wedding, or saving to buy something that you really want (or something that you probably don’t need), or is it for retirement?

Like pretty much everything else in life, it’s always fundamental to build a solid foundation before navigating further. What are some habits that you are trying to implement to help you progress further in your financial journey?

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