Three attitudes to develop the habit of saving – 06/13/2023 – From Grain to Grain

Most individuals reach retirement with savings well below what they need. Part of the problem lies in the lack of knowledge of what the necessary value would be. But even with some idea of ​​what it would take, most end up not achieving it. The biggest problem is the same one that keeps us from reaching other goals, for example, improving our physical shape, learning another language or playing a musical instrument.

To achieve the level of savings necessary to achieve financial independence, investing should be a habit.

Just as easily we acquire bad habits. Implementing good habits, too, is easy. We believe that good habits are hard, but the problem is how we try to acquire these good habits.

We usually want to start the good habit at an advanced stage and interpret it as something painful.

These are two of the three attitudes you must reshape to develop the saving habit.

How many times have you caught yourself saying: I have to lose weight or I have to save?

Having to do something means that this action causes you suffering or weariness.

The first attitude is to change the way of seeing the action of investing. Look at it as an opportunity to achieve something bigger. For example, change it to: I can save or I want to save.

But it’s not enough to say that you want or can, you need to act. And this is the second attitude.

Many are lost at this time, as they are stagnant in the act of planning, studying, thinking and worrying.

As James Clear warns in his book Atomic Habits, it is necessary to understand the difference between being in motion and acting:
“When you’re in motion, you’re planning, strategizing, and learning. These are all good things, but they don’t produce a result. Action, on the other hand, is the kind of behavior that will produce a result.”

And this is the second attitude to take, that is, start saving, even if you haven’t done all the planning yet.

A habit can only be built with action. However, you need to start off properly for robust habit formation.

No one starts smoking by smoking a pack of cigarettes. Those who acquired this bad habit, most of the time, started with a simple drag on a friend’s cigarette at a party.

Every habit should be started as a small, easy task that can be repeated systematically.

Starting a savings program is similar to gaining muscle mass at the gym.

You don’t arrive on the first day trying to lift a big load at the gym. If you do that, you’ll get hurt and soon stop training. The same goes for investments.

You must have heard many say that you should save 10%, 20% or 30% of your salary. It’s true, but it’s not with this load that you start.

Habit creation is related to frequency not intensity. Start with a small amount in relation to your income. In no time, you’ll see that you can upgrade without breaking the bank and with little effort.

So, tell yourself that you can and want to save, start investing frequently and start with little.

If you put these three attitudes into practice, you will easily develop the habit of investing and this habit will transform much more than just your financial life.

Michael Viriato is an investment advisor and founding partner of Investor House.

Talk directly to me via email.

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