Short answer: of course, there is! However, this requires a fundamental shift in the way we look at our personal finances and saving in general. Saving money is a hard thing to do is it requires that funds be allocated from other areas. As such, there are needs and wants today that must go unfulfilled for the sake of having resources down the road.
Indeed, changing habits and even culture can be a daunting task. It’s not easy to ask people to give up their lifelong habits and do a 360-degree turn. Achieving this change begins with financial literacy. Many adults aren’t proficient in financial matters. And while this is not anyone’s fault per se, it is a question of making an effort to learn as much as possible about all things financial.
That’s why we are here.
However, financial literacy, on its own, is not enough. Sure, educating people on the importance of saving and money management is useful, but it is not enough to drive a fundamental shift in behaviours and money management patterns. There needs to be a significant shift.
On the whole, an “unconventional” means of saving money begins by incentivising individuals to decline their spending and allocate those funds toward saving. Not only does this make for a major step toward achieving financial health and wellbeing, but it is also a critical move toward building wealth. Yes, wealth can be built through dedicated work and focused habits.
Alas, consistently saving money is not easy for most people. Building sound financial habits are something that is built over time. Many times, it involves unlearning many ingrained habits. Such habits often stem from childhood. As such, this implies overriding old ways. As the adage goes, “old habits die hard”.
In this regard, incentivising individuals through a sort of “positive reinforcement” can provide viable alternatives for saving money. This is why the traditional means of saving money, which is simply putting money in the bank, simply don’t respond to people’s expectations anymore. In addition, the constant pressure from marketing, that is, compelling individuals to spend as much money as they possibly can, is not the most conducive environment to saving.
Ultimately, building positive habits boils down to giving people a reason, a justification if you will, to make a shift in their habits. If anything, the recent COVID crisis has provided enough justification to prove this point. Those who have been caught off guard due to their lack of savings can attest to the fact that it’s necessary to build emergency savings.
When looking to the future, there is plenty that the Fintech sector can do to help individuals and families prepare for the looming economic consequences of the COVID-19 pandemic. Therefore, the time to build healthy habits is now. By delaying these changes, people are setting themselves up for a potential crisis that may very well put their long-term financial health in jeopardy. Since it is clear that depending solely on the government is not enough, something must be done today to address these matters. When it comes to saving for a rainy day, it’s never too soon to start doing it.