Topic: The savings problem - page 7. (Read 2141 times)

It is quite difficult to keep a job for a family member who has most responsibilities for the kids. Keeping the job requires hiring someone who will watch a newborn family member and this makes the expenses bigger. Sometimes it is cheaper to take care of a baby by yourself then to hire a professional babysitter. That’s why the situation, where two adults meet each other and start family, when both of them are working and having stable salary, is close to impossible, at least for the first time when they will have an increase in family.

It will be quite difficult for a family to save or set aside money to save in their own life, because the large number of members in a family also becomes a very real obstacle for the head of the family themselves in terms of adjusting their savings plans. Because in reality, when the number of family members increases, of course the income of the head of the family must also increase so that his living expenses can be quite appropriate and equal. But if the family still has to spend more money than the salary they get, of course it will be very difficult for them to stay out of debt because in the end they have to continue to be in debt and cover it when the new salary comes out.

However, for those who are single or unmarried, at least they can still make a plan to save so that it won't be so difficult to support their own family when they are married and ensure that their partner also has a job so that the level of income they get later can be more and they don't have to borrowing to cover the family's basic needs in life.

Stagnant wages, skyrocketing housing prices, and dwindling purchasing power aren't just temporary hiccups; they're chronic ailments plaguing our economic system. And like any illness, ignoring them won't make them disappear. We need a diagnosis, a treatment plan, and a commitment to recovery.

Fine-tuning, not reinventing, is the key. Tinkering with policies to encourage wage growth, manage housing markets, and empower the middle class is the first step. It's about finding the sweet spot where everyone wins – businesses thrive, workers get a fair share, and the gears of the economy keep turning smoothly. Fiscal and monetary tools are our tools, and it's time to wield them with precision and purpose.

But fixing the economy isn't just about policy prescriptions; it's about equipping people with the tools to navigate it. Enter personal finance education, the missing piece of the puzzle. We can't send young folks into this economic jungle without a compass and a survival guide. They need to understand the new game rules, the art of wise spending, the power of saving, and the magic of investing.

i think everyone should atleast once try doing a "one month challenge" where they look at their local social security/welfare/unemployment provisions of income and just act as if the only income they have is their amount provided in dire times.
and then open a spreadsheet and then truly budget within those limits.

then they can truly see where they are spending excessively if they are forced to live within a budget.

most people instead try to find excuses or "needs" to spend their regular income, mainly because they are afraid to change their lifestyle. and its the non-desire/fear of lifestyle changing that makes them avoid saving and just not even try

saving is not about wealth accumulation to get rich...
savings is not about living poor to attain riches..
saving is about saving an allotment of money as a rainyday fund for when things do get dire/worse!! so the dire incident doesnt hurt so much because you are insuring yourself of those events via the rainy day fund

so practice/pretend as if this coming month is a dire situation of unemployment, live and spend as if this coming month is like being on unemployment welfare. and set aside the excess..

challenge yourself. heck call february your "frugal february" month. see how much you can set aside in february
take the next few days to plan all the budgeting strategies you can think of, or learn about to do a one month challenge starting Feb 1st

I think income will influence how much people will spend to meet their daily costs and just imagine if there was no income, how could they try to create a strategy to save. The way to increase income and get rid of unnecessary expenses so that the balance will be much more rational because expenses are much less compared to income. If someone only has one income then there are many things they need to do except for one income with a large salary.

But if we are talking about a small salary then it is appropriate for that person to try to find a way to make money elsewhere because otherwise life will never change. Uncertain economic conditions sometimes make it difficult for us to find work and there are places where they start to reduce workers because they are unable to provide salaries due to declining sales.

Recognize your talents and explore your potential because that's where we know what to do, currently technological developments are quite widespread and there are many ways for someone to make money, as long as they know what to use to do it. In this way, we will have the opportunity to save and invest or build a business independently without the involvement of other people as investors.

It was inevitable really, the "West" had things very good and easy for a long time, but other countries in the world - huge ones like China and India are fighting their way up. All these materialistic things in the world come from finite sources and when there are more consumers around it means that purchasing power in these big importer countries will go down. America used to produce a lot more of the stuff that they used, then they decided to export it to places like China where it became cheaper to make, now the Chinese have a taste of the good life and don't have plans to turn back. Countries like America and the ones in Europe have had good times for a long time, so they will need to adjust to this new reality.

Nope it's the lack of discipline. Inflation is when prices rise thus the money you make buys less.

This purely inflation. If the amount you are spending is more than what you are earning, you need to take some balance to check your spending limits, your demands, your needs and your wants; reduce your wants and focus on your needs so as to get balance or you will be a debtor for life because your salary will only be use to settle your loans so that you will be eligible for another loan. That is why wise people says that if your salary is your only source of income, then you are just one step away from poverty, that is why it is advisable to have a side hustle apart from your main work.

Tech, web development, and other skills can earn us more money to stop relying on our salaries; if we have side hustle, we will have chance to save money for investment and for future use so that we cannot be debtors for life. Let's use our time to learn skills that will help us in the future.

Another reason for this problem is that expenditure is higher than income.  When a person earns 3$ and spends 4$, he has to borrow the remaining 1$ and pay it back with his salary. This is how the debt started. This is how people continue to borrow. This is how he  No more saving.  There is an overpopulation problem with it.  If there are 8 members in a family and only one earner, how will that person save money?

This has been the problem recently, people prefer living extravagant lifestyle which is bad, saving is no longer an option for people, showing up and lavishing in debt is now a normal lifestyle, this set of individuals that toll this lane will regret it in no long time because saving a little digit of your of your earnings is good my time anyway, sometimes I wonder how individual see needless stuff as a necessity, how would one ignore saving which the fundamental aspect of human financial foundation to expend in things that are not of utmost important, a debtor is more like a prisoner, he is not free until his debt are been paid.

Do you expect people not to eat food , have access of electricity, and water just because things are expensive? This are things that people can't do without.  No matter how expensive food is people will always spend their last money to afford food to survive. Managing food, water,  electricity will not change anything honestly. Things are very difficult,  money is hard to get but their are things we will always need in our everyday life .

Saving makes your money a dead investment and could be affected by inflation. Saving fiat and then hodling other class of assets might be better. Saving is good for only short term purposes to cater our basic needs and of course other expenses like health and property maintenances. That is why savers are the only survivor in any crisis compared to those who keep on spending their money for nonsense things and living in a lavish lifestyle.

The median salary in US in 1970 is around 6K to 7K a year and the price of a small house is 20K. So price of the house is 3 years of salary but let's compare it with the year 2023 the average salary is $60K a year and the price of a house is easily over 500K so the price is 9-10 years that is the difference which I am trying to point out.

Surely the ways of money making opportunity is wider now but also the competition is high so only the best of best can be at that stage while an average individual will have to survive forever.

I think that is still possible now, as long you know how to budget your salary and you have no debts. You can always built even a small property because I'm sure that is still affordable. But if your salary is huge and then you also have an extra income, building a big property is also possible.

Young generations are still on to something which are less serious, so yeah they may not build anything valuable with their revenue/money but as long as they grow older, their thinking will also change and start to value their money more. There may be low inflation before but there are now more ways to earn. This makes people encourage to invest and earn more. The more they will do it because they think life is harder now. But indeed, there are also people who only wants to live the moment, thinking life is too short to wait and worry.

saving just for the sake of saving, never ends well. its not enough of a motivation, people usually give up if there is no goal
you need a reason, something to get excited about, something to look forward to, so that you stay on-plan
something to trick the brain that the saving today is actually a gain and not a loss/depravation

to start saving. just think about tomorrow
look at your income. take out the bills+expenses.
and then with the remainder. divide it down to a daily amount

each day when you are thinking about buying something. think about
"if i dont buy this today, i can buy 2x tomorrow"(virtual mindtrick just for that instant moment in time)
EG a $4 coffee
then tomorrow. you dont feel guilty buying ONE coffee. because you saved on yesterday's. and because you went without coffee yesterday. sipping that ONE coffee today FEELS TWICE AS NICE. it starts to feel like a well deserved treat. rather then just a drink, you enjoy the coffee better
(its the mindset trick.. much like the opposite of would christmas feel as special if christmas was everyday)
if you can repeat this each 2day, over 30 days you have saved 15times of $4 = $60 a month = $720 a year

how many items do you buy a day that you can play the "think about tomorrow" to live a day without

do you eat $10 of steak each day. can you eat $5 of chicken so you can tell yourself it free's up cash today to buy $15 prime steak tomorrow, or save $5 every couple days($75 a month) for future event($900 a year)

then test yourself. can you go 2 days without, 1 day with..

you dont have to live a whole year without steak or coffee.. but even just the one day off, one day on two day challenge. can save $1620 a year

..
im not suggesting to think of a big item of $1620 a year to have as a goal. but just having a save today to enjoy mentally twice as much tomorrow. makes things every couple days feel a treat and gets you to save. and feel that saving enjoyment multiple times a week instead of once a year
you feel the achievement every couple days instead of at the end of the year

Most people forget about tomorrow, but I am also against forgetting about today. If you keep working towards a tomorrow that may never come, so that your children will live a better life you will forfeit your life all together. You should balance it out, you shouldn't live just for today, but you shouldn't live for just tomorrow neither. You should live the best life you possibly could while saving for tomorrow, find that balance, put some aside, and spend the rest so that your life had some meaning.

I may go one way or the other time to time, but these days, I am just living for debt, but when that's over, I will try to balance as much as I can. I like to live a good life, while also putting some aside every single month for the future.

lets imagine
M2 money= is comprised of cash outside of the private banking system plus current account deposits – while also including capital in savings accounts, money market accounts and retail mutual funds, and time deposits

lets imagine a $20trill economy of wealth of M2
lets imagine 2.6% of that is $520,000,000,000
lets imagine 50% of 330m population = 165m people
now on that math alone 50% of population only averages $3,151.51 in the m2
then deducting min wage salary ($15/h*8hour*5day*4weeks=2400) is $651 left

so seems once you deduct someones monthly salary from that.. all that is left is... yep not much at all as "savings"

..

here is the thing.. if people were naturally savers.. there would be no loans.. no need for credit cards. because people naturally save
its like if people were naturally banana farmers, there would be no retail of bananas as everyone would make their own produce

in short people are not natural savers, not any more
..
credit cards did not exist pre 1950's so people WERE better at saving pre WW2
however as times move on and societies teaching do not educate people to save/ration anymore, but instead educate people to earn a credit number, so they can then get more credit

I just read an article that stated 44% of Americans don't have the savings to handle an unexpected $1,000 bill.  This seems shocking to me.  Certainly this can't be totally true...  The article even argued that it is against human nature to save.  I'm not sure I believe that.  As a saver, I feel the opposite.  I think human beings are meant to save and make sure their future will be provided for.  However, companies spend billions of dollars advertising to get you to spend your savings on their products.  Society has been trained to not save and chase the Kardashians by buying overpriced goods.  Just know this fact and do better.  It makes it easier to get ahead in the end...

People have different methods to execute the act of saving. For some, they don’t have to do a lot, they’ll find it easy to save the money. If you find it difficult because there are things that needs the money, make saving a priority and need too. Before the income comes, don’t put saving to the bottom of the list (Something that could happen if money was left). No. Put it at the top. Let it be the first thing you resolve when you receive your salary.

Good observation. I also thought this is one of the main reason why the decline of the birth rate. The Millennials must have seen how hard it is to live in a modernized world with a lot of unemployed people and the inflation rate are rapidly growing while the salary increase can barely cope up with the inflation. But in spite these facts, I believe there are still those who can afford to put aside a savings without sacrificing anything financially. Since the economy are constantly changing, people must need to adapt to the changes to keep up being able to afford the cost of living. One must need to constantly learn new skills to keep up with the competitive  job market. The more skilled you are, the more you're earning.
Also, savings may not be a thing for the younger generations now as they are already paying premiums for retirement  plans and other insurances.