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Building Barriers: The Smart Way to Save More

Cover Image for Building Barriers: The Smart Way to Save More
Jason Banks
Jason Banks

(Photo by André Bandarra on Unsplash)

Merging AI innovation with human insight, this post is an example of eras's dedication to using technology in enhancing your financial journey.

A fascinating aspect of financial behavior, as highlighted in a 2021 study published in PLOS One, is the effectiveness of creating barriers to access funds in fostering savings. This strategy is not just about saving money; it's an exercise in money mindfulness that can significantly improve your financial well-being.

The Psychology of Saving

When it's harder to access your money, you're less likely to spend it impulsively. It's like keeping cookies on a high shelf to avoid temptation – out of reach, out of mind. This principle applies beautifully to financial literacy, where creating a little inconvenience can lead to a lot of savings.

Making Your Money Harder to Access

The idea is simple: use savings accounts or investment tools that have penalties for early withdrawal or require a process to access funds. This extra step gives you time to consider whether an impulsive buy is really worth it.

The Challenge of Immediate Gratification

We live in a world of instant gratification, where waiting can seem like a hassle. The challenge with making your money hard to access is overcoming the desire for immediate availability, especially in emergencies.

Balancing Accessibility and Restraint

To tackle this, maintain a separate emergency fund that is more accessible. This way, you have the peace of mind that you can handle emergencies without dipping into your long-term savings.

Enhancing Your Financial Literacy

Interested in further strategies to improve your financial literacy and well-being? Check out our money mindfulness program for insights into how behavioral changes can significantly impact your financial health.

The Art of Self-Control

Creating barriers to accessing your funds is more than just a savings tactic; it's a lesson in self-control and financial discipline. It's about making conscious decisions rather than reacting to momentary impulses, building a stable financial future in the process.