For many, saving is difficult due to "hyperbolic discounting," the psychological tendency to prioritize immediate gratification over long-term benefits. For example, you might be tempted to buy a new car, increasing monthly payments, rather than saving more for retirement.

Financial stress can also derail savings plans. Some react to financial pressure by spending more to regain a sense of control, even though logically, they should save more.

These psychological tendencies can significantly impact your ability to achieve future financial goals. So, when faced with the temptation to overspend as a reward or to relieve stress, experts recommend these 3 steps.

Counting money at a bank branch in Hanoi. Photo: Giang Huy

Counting money at a bank branch in Hanoi. Photo: Giang Huy

Link your goals.

Before spending, review your savings goals. To boost motivation, link these goals. Research shows the most motivating financial goals relate to security (like retirement) or self-actualization (like starting a business or donating to charity).

Consider connecting short-term goals with larger ones. For example, link "saving for home repairs" with "charitable giving" by pledging surplus repair funds to a favorite non-profit. Clear, meaningful goals help maintain motivation.

Reassess your savings.

Financial stress often leads to justifying current expenses over saving. Start by reviewing your entire budget. Detail your monthly income, expenses, and what you spend on.

If there's no monthly surplus, identify areas to cut back. To solidify motivation, calculate how much monthly saving is needed to reach your goals within your desired timeframe.

Explore how varying monthly savings amounts affect your retirement prospects. This provides a realistic view of long-term preparation.

It's okay if you can't save as much as desired right now. The key is consistency within your means, adjusting as income changes. This keeps you moving towards your goals.

Automate your savings.

Make saving as easy as possible through automation. Manually transferring money to savings accounts increases the likelihood of forgetting, delaying, or deciding to "treat yourself this month."

Studies show automating savings leads to higher savings than manual methods. Take time to set up automatic monthly savings transfers within banking apps. This helps maintain your plan for months, even years.

Phien An (according to AP)