Why Do Financial Illusions Often Make People Fail to Save?

[Suba]

Basically, saving is a habit that is done from an early age, but saving will be very difficult to do consistently by novice savers, especially if they are trapped by illusions or false perceptions about finance or also because of the influence of cognitive bias so that they ignore finance. I meet many people out there who have a fairly high income, have adequate financial literacy. But they have been trapped by illusions so that they distance themselves from their habit of saving money.

Some financial illusions that we often encounter in our friends such as:
- Considering discounts as one way to save money.
- Will save if needs have been met.
- Considering a salary increase as a bonus for shopping, even though the salary increase is accompanied by an increase in prices or inflation, etc.

 

[Springtime]

Indeed, saving is a habit. I have been putting a portion of my monthly earnings into a fixed account for many years. I get used to it. It is a habit to me. For some people, if they do not have the habit of saving, they will be easily trapped into having financial trouble no matter how much they earn.

 

[Augusta]

With the illusion comes lack of financial planning Unexpected expenses which comes from Peer pressure and lifestyle inflation

 

[Kross]

It is even harder for people that see regular income say weekly income to save. They always believe that they can always find money.

 

[eLdavis]

They end up failing at the end because they allow this illusion that things are okay financially stop them from saving.

 

[Trush Jodie]

Some people don't understand that the concept of job security is a mirage. And that is why they don't save.

 

[Starmix]

Doing this are mostly young people who like to enjoy now and never mind if they regret later reaching old age broke and helpless to the max. They need guidance.

 

[Augusta]

Because we perceive money to have more value than it does (due to inflation), we underestimate the amount we need for retirement and other long-term goals.