The psychology barrier of saving money and how to overcome them

Budget. Checked. Necessity. Checked. Wallet. Empty?  If you need to save money, here are four big reasons why people fail to save money and some practical steps (seems legit to me) to make saving money a reality.


Tomorrow, and tomorrow, and tomorrow – signifying nothing. Adapted from Macbeth by William Shakespeare.

Are you waiting for a perfect timing to start? The perfect time is now. Thinking about tomorrow gives us some sense of hope and relief but tomorrow theory does not apply to saving money. Saving should be right here, right now.

Social pressure

We are the average of 5 people we hang out with and we all have the posh friend that silently influence our spending behavior.  Friends rarely cause us to buy stuff, that's what influencer do to us. Spending on food, however, is easy peasy. Dine in a fancier restaurant and the lunch would cost $50 instead of $0-5.

If you have to dine at places above your budget, try to take the lead. Choose when (where lunch and dinner are priced differently) and what to eat. I find that when I first say no drinks or order plain water, the group of friends who dine with me would also not order drinks. But if I let others take the magic wand, everyone starts ordering float and flop the bill. It's amazing how crowd tend to behave. 

Social media influences? Unfollow the friends that intentionally make your life unbearable. Imagine the “pain” you give them back when they see their followers dropping. That's called "two-slap-back". That’s winning.


Sometimes a day go sour and we want to feel better by spending. Or we are hungry, sleepy and we need to grab another unhealthy snack, another coffee. We could even be sick of saving money. It’s not easy to overcome impulsive physiology spending, requires a lot of self-understanding and life organization. Try to work-around your cravings instead of self-depriving. If you tend to buy bottled drinks, try carrying a tumbler. If you like to snack, prepare some snacks in advance. If you work late nights, precook meals on weekends. If you shop a lot, delete the shopping app, start afresh with a new email address. Start with simple habits so that you don’t get overwhelmed.

Market persuasion

Advertisement screaming about how your life gets better with the latest product and soon we start believing it’s true.

One recent example is kids friendly wall paint. I turn on the radio and they have childcare center owners sweet-talking on the radio, stressing how important it’s painting your wall with a kid’s friendly paint. Soon, I start to think I NEED to get this paint. But how many kids actually do suffer from bacteria on the wall, especially if your house is clean? And what’s inside the paint that can actually inhibit bacteria growth in the environment? The substance used could be no less in toxicity level.

Same goes to Fintech. I have been getting emails about losing out free gold from HelloGold. And yes, you get the convenience to buy gold on your phone – super awesome. For that, you will be paying not only the buy-sell spread but also 2% management fees yearly! Talk about a gold that comes with inflation rate. So read the fine print.

And read less review (aka smart marketing). It happens, I didn’t need a new phone, be it iPhone X or Samsung 8. Next, I hear a reviewer saying"your Instagram story will never be the same" with this latest gadget. I start to ponder, I start to imagine and I start to crave, it feels like I actually need a new phone. But I didn't want a new phone five minutes earlier. 

Be aware of market persuasion language and triggers and you’ll be less susceptible to persuasion. Psychology persuasion is one of the most powerful tools, used by marketers, agents and politicians alike.

Even more, small steps to overcome saving barrier

Automate your savings to counter procrastination 
Set a standing order to transfer your money to investments, debt payment or savings account monthly. Choose no fee or low fees transfer, opt for cheap loans and high savings interest account. Putting in a high interest account motivates me to keep the money inside the bank. I used to visit different bank just to find out about their account features but we now have GoBear, it is free and makes finding the best saving account simple.

Lower your requirement to counter peer pressure
When you dine out just because, don’t read the menu in detail. Order the cheapest item you will eat. It might feel odd in the beginning but it'll be normal soon. This is known as normalization of deviation.

Have a happiness fund to counter bad days
Count how much you spend on discretionary spending last month. Divide that number by half, and a further 30. This is how much you have daily to buy or do anything you want.

List down what you own to say no to market persuasion
It could be any list, your clothes list, books list, kitchen utensils list…you’ll get so overwhelmed you rather not buy anything for the month.

Now that you are immune to these factors - Start Saving