How to start a saving fund

• Saving is a discipline not unlike getting fit
• Starting too much at the beginning can be demotivating
• Start small and create a habit then build on it
• It takes 30 days to change a habit

Last year, I decided that I was going to get fit, I felt that I needed to become a little more limber and trimmer. Call it a mid-life crisis, or maybe just another crazy notion that I get every now and then. Anyway, I decided that I would do 50 press-ups every morning when I got up, combined with some other stretching exercises. The way I see it, if I am going to be financially fit when I retire then I also want to be physically fit. I want to be able to enjoy my retirement and not struggle to get around. I don’t want to sacrifice things now so that I can retire with a decent income only to find that I cannot enjoy it due to some ailment or stiffness.

The next morning, I got up and went straight into some of the stretching exercises, no problem there. I got down on all-fours to start my 50 push-ups, after five I was finding it difficult but I did get to 20. Wow, I was really out of shape! The next morning tried it again, same thing, got to 20 press-ups. A few days later, I was not able to break the 20 press-up barrier and even doing 20 was very painful, it wasn’t getting any easier and it was completely de-motivating. About a week later, I gave up! It was just too hard.

After a month, I realized that I was trying to do too much, too quickly. I needed to slow down and take baby steps. I asked myself, what is the minimum that I can do without getting discouraged? I decided that five was a good amount to start with. The next morning, I started my exercises again, I easily done five push-ups. It wasn’t a strain and I didn’t have to push myself to do it. The next morning I done another five, and the morning after that another five. I kept doing five push-ups every morning, week after week and after one month, I had conditioned my body into doing these exercises. Not only could I do these push-ups but now, I wanted to do them; I needed to do them; I liked doing them. I felt that I had changed a habit. I had changed from not wanting to do any exercises to wanting to do them.

I remember reading somewhere that it takes 30 days to change a habit. If you want to stop using the word ‘like’. Like all the time, like! Then each time that you say the word, you need to tell yourself to stop doing it. You need to catch yourself doing it and then prevent yourself from saying it. If you do that for 30 days, apparently, you will change and stop using that word. You have changed a habit.

The exercise routine that I went through was similar, I started with something easy that I could do, something that wouldn’t be painful and just kept doing it for a month. I approached my saving for retirement the same way. I started saving small amounts, something that wouldn’t hurt. Once I was conditioned into that amount, then I increased it a little more. If I had started with a large amount at the beginning, I may have been able to do it but it would have been a struggle and would have been de-motivating.

If you think that you cannot save, maybe you are setting the goal to high. Don’t force yourself to start saving €1,000 per month, if that is going to be painful. Start with the minimum amount that won’t be painful and keep saving that amount until you start to see some benefit from it. It could be as little as €20 per month but it needs to be consistent. When you have consistently saved over a period of time, you will notice that that you don’t even think about that money any longer, at this point you can start to increase your savings rate. Get comfortable with saving that amount and then increase it again. Keep increasing it until it does hurt then maintain that savings rate right there. You don’t want to go over that as you will get to a place where it is just too hard and that might unmotivated you and make it too easy for you to give up.

I was told a story once, about a person that was training an athlete to run races. He trained the athlete how to use the best stride, breathing techniques, strategies, and even what the athlete should be thinking about during the race. Using all the techniques, the athlete was soon running a 3 minute mile. Another trainer approached the athlete’s trainer and said, are you going to push him to do a 2:50 mile now. The trainer said no, I will encourage him to run a 3:00 minute mile every day for the next 30 days until it becomes natural and easy to run at that pace. After that then I will then push him to do a 2:50 mile.   

Make saving easy on yourself in the beginning; don’t push it too hard otherwise it will give you an excuse to give up. Start small, stay motivated, and build on it.

Do your own due diligence, get financial advice before investing in anything. I am not a financial adviser nor do I give advice in any fashion. This information is provided based on my own research and experience.