behavior that impacts savings

Behavior That Impacts Savings Positively & Negatively

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Managing finances can be a challenging task, requiring discipline, self-awareness, and a clear understanding of what behaviors positively and negatively impact savings. Keep in mind the goal should be having a healthy relationship with money and having it work for you in the best possible way without stress or struggle in the long term. Getting there is a process and part of it is learning positive behaviors that support your goals and get rid of the negative ones that work against your goal.

What does savings mean?

Savings refers to the money that is put aside from your income or earnings for future use. It is the portion of income that is not spent on immediate expenses but is instead reserved for future use. Savings can be used for various purposes, such as emergency expenses, retirement, or a down payment on a home.

Savings can provide a sense of financial security, as it allows you to prepare for unexpected expenses or emergencies. Additionally, savings can be used to achieve long-term financial goals, such as buying a home, starting a business, or funding your retirement.

In this article, we will explore some common behaviors that can impact your savings positively and negatively.

Behaviors that Impact Savings Positively

behavior that impacts savings
Image by Tima Miroshnichenko
1. Budgeting

One behavior that impacts savings positively is budgeting. Creating a budget helps you to track your expenses and income, and identify areas where you can cut back on spending. When you have a clear picture of your finances, you are more likely to make informed decisions about your spending and saving habits.

If you have trouble creating a budget please read this article that does a deep dive into budgeting.

2. Saving First

Another behavior that impacts savings positively is prioritizing saving. Rather than waiting until the end of the month to save what is left over, you should make saving a priority and set aside a portion of your income for savings at the beginning of each month. This can be achieved by setting up an automatic transfer from checking to a savings account or by adopting a “pay yourself first” mentality.

3. Avoiding Impulse Purchases

Impulse purchases can be a major obstacle to saving money. To avoid impulse purchases, you should create a list of what you need before heading to the store, and stick to the list. You should also avoid shopping when you are hungry or tired, as this can make you more susceptible to making impulsive purchases.

4. Living Below Means

Living below your means is a crucial behavior that impacts saving money. This means that you should spend less than you earn, and avoid taking on debt to fund your lifestyle. By living below your means, you can build an emergency fund, pay off debt, and save for the future.

5. Investing

Investing is a smart way to grow your savings over the long-term. You should consider investing in a diverse range of assets, such as stocks, bonds, and real estate, to reduce your risk and increase your potential for returns. Investing can help you reach your financial goals faster and should be a part of any long-term savings plan.

Negatively Impacting Savings

behavior that impacts savings
Image by Mikhail Nilov
1. Overspending

Overspending is a behavior that impacts savings negatively. When you spend more than you earn, you are unable to save, and may even go into debt. To avoid overspending, you should create a budget and stick to it, avoid impulse purchases, and live within your means.

If you have a problem overspending then please read this article to get guidance on how to avoid overspending.

2. Lack of Discipline

Lack of discipline can be a major obstacle to saving money. This can manifest in various ways, such as failing to stick to a budget, making impulsive purchases, or failing to save regularly. To overcome this obstacle, you should set clear financial goals, create a plan for achieving them, and hold yourself accountable for your actions.

3. Ignoring Debt

Ignoring debt can be another behavior that impacts savings. When you have debt, you are paying interest on that debt, which can eat into your savings. To address the debt, you should create a plan for paying it off, and make it a priority to pay off high-interest debt first. By paying off debt, you can free up more money for saving and investing.

For a detailed guide on how to get rid of your debt in a short amount of time then please read this article.

4. Lack of Awareness

Lack of awareness can be a major obstacle to saving money. This can manifest in various ways, such as failing to track expenses, not knowing how much debt you have, or not knowing how much money you have in savings. To overcome this obstacle, you should create a budget and track your expenses, regularly review your debt and savings balances, and stay up-to-date on your credit score.

5. Failing to Plan for the Future

Failing to plan for the future can be a major behavior that impacts savings. When you do not have clear financial goals or a plan for achieving them, you may not prioritize saving and investing. To overcome this obstacle, you should create a long-term financial plan that includes clear goals and a roadmap for achieving them. You should also regularly review your progress and make adjustments as needed.


Saving money is a crucial aspect of building financial stability and achieving long-term financial goals. By adopting positive behaviors like budgeting, saving first, avoiding impulse purchases, living below your means, and investing, you can build a solid foundation for your financial future. On the other hand, negative behaviors like overspending, lack of discipline, ignoring debt, lack of awareness, and failing to plan for the future can hinder savings and make it harder to achieve financial goals. By being mindful of these behaviors and taking proactive steps to address them, you can take control of your finances and achieve greater financial freedom.

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