1. Why saving money is so hard for some and one simple
system to change that
Part I
According to the Living Balance Sheet, 29% of Americans have savings less than
$1000, 56% have savings less than $25,000, 97% of baby boomers have not saved
enough for retirement, and 55% of Americans have not saved one penny last
year. Our credit card debt is at an all time high of $772 Billion dollars and college
graduates collectively owe more than $1 Trillion in student loan debt.1 To put
that in perspective Greece’s national GDP in 2013 was $242 Billion and the
national debt was $424Billion2.
How could this be? How have we done so poorly in saving for the future? This
two-part article explores some of the causes to this failed level of personal savings
and what we can do to change.
Vague Goals. Your goals should be clear and measurable so you know when
you’ve accomplished them. For example, “I want to do a better job saving
money” is not a goal. It is a statement of intend. Instead, “I want to save $600 by
Oct 1, 2015 for a new ski season pass.” would be a much better goal. It specifies
the amount, the purpose and a time frame. This way you’ll know when you get
there.
Underestimate the true cost of living. Few people can very accurately track

2. all the money we spent. We eat out more often, spend more than we remember,
loose track of pocket cash and fail to predict unexpected
expenditures. Regardless the reasons most of us underestimate by 5-10%, some
even 20%.
We feel that we “deserve nice things.” Personally I can totally relate to
this. Behind the glamorous life style of Silicon Valley is this relentless culture of
work-life integration. Smart phones, smart watches and push-notifications keep
us mentally engaged all the time. Corporations’ insatiable appetite for efficiency
pushes their work force to an ever-higher breaking point. For many, spending
money becomes an outlet to deal with stress.
Unrealistic reliance on mental strength instead of a system and
structure. Creating a Savings means a change in our (spending) habit and it is
by definition not natural. Initial enthusiasm and excitement will fade over
time. Without a system and structure to serve as a continuous reminder of our
mission will only create stress and will not produce our desired outcome.
As a result, many families start on the journey to create savings but ultimately
give up. After repeated failed attempts we start to loose trust in ourselves and
choose to become overwhelmed by the daily demands.
This absolutely does not have to be the case. You must approach this with the
intent of creating a new habit and not conquering a goal. I have taught many
people a simple system to achieve this. Read more about it in Part II of this
article.
This article was written by Peter Mu
Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS), OSJ 20 Bicentennial Circle, Suite 100, Sacramento, CA 95826, 1-916-379-
0200. Securities products/services and advisory services are offered through PAS, member FINRA, SIPC, Financial Representative of The Guardian Life Insurance
Company of America (Guardian), New York, NY. PAS is an indirect, wholly owned subsidiary of Guardian. Pacific Advisors, LLC. is not an affiliate or subsidiary of
PAS or Guardian. Insurance Products offered through One Pacific Financial & Insurance Solutions LLC, DBA of Pacific Advisors, LLC. Pacific Advisors, LLC. is not
a registered investment advisor. CA insurance license 0E19513
This material contains the current opinions of the author but not necessarily those of Guardian or its subsidiaries and such opinions are subject to change without
notice. Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information
has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when
coordinated with individual professional advice.
Links to other sites are provided for your convenience in locating related information and services. Guardian, its subsidiaries, agents, and employees expressly
disclaim any responsibility for and do not maintain, control, recommend, or endorse third-party sites, organizations, products, or services, and make no
representation as to the completeness, suitability, or quality thereof.
Sources
1. The Living Balance Sheet. http://www.pacificadvisors.com/peter_mu/financial_balance
2. The World Bank. http://data.worldbank.org/indicator/NY.GDP.MKTP.CD
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