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Her Money: Is ’emotional spending’ hindering your ability to save?

Published 09:00 18 Jul 2024 BST

Updated 09:03 18 Jul 2024 BST

Sophie Collins

Her Money: Is ’emotional spending’ hindering your ability to save?

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Learning to save money is a crucial aspect of financial stability and planning for the future

So why is it that so many of us struggle to build a savings habit - no matter how big or small.

In Ireland, various factors contribute to this challenge - one of the main things being the clear issue with the cost of living crisis.

There is also a general lack of financial education and literacy and the issue of emotional spending (we're all guilty of this).

We hit the streets of Dublin to ask people to offer practical advice on how to overcome these obstacles and develop better saving habits.

Lack of Financial Education

One major reason people don’t save is the lack of accessible information on financial management.

As one person noted: "Probably just because there's not enough information about what to do if you really want to know about it.

“You need to actually go out there and do it yourself, so a lot of people don't realise that they can do that or that the information is there, so they just don't really find it."

This sentiment highlights the gap in financial education, especially in schools.

"There is no education. You're not taught this in school. In business and secondary school or something, there should be stuff mentioned but it's just left."

Without foundational knowledge in financial literacy, many people are unaware of how to start saving or manage their finances effectively.

Financial Literacy

Another significant issue is poor financial literacy among young people.

A second individual pointed out: "I think the issue is really poor financial literacy for young people, and women in particular."

This lack of knowledge can lead to poor financial decisions and an inability to save effectively.

Practical Saving Tips

Despite these challenges, several practical tips from Irish people can help improve saving habits:

Save for a Rainy Day: One straightforward piece of advice is to always put away something for unexpected expenses. "My saving tip is always put away something for a rainy day." This approach ensures you have a financial cushion for emergencies.
A Backup Plan: Another person emphasised the importance of having a backup plan while also enjoying life. "It’s great to always have a backup plan, keep your savings, there’s your needs and necessities. But then, I'm a big believer in you don't have to be the richest man in the graveyard. Enjoy your life too, have things to remember because the memories are what it's all about and leaving an imprint on the world, so spend your money well but don’t leave yourself struggling." This advice balances the need to save with the importance of enjoying life.
Information and Support: The importance of seeking information and support is crucial. "There are some people who aren’t informed on what they have to do or the people in their family don’t know how to tell them or help them." Educating oneself and seeking guidance from knowledgeable sources can make a significant difference.
Emotional Spending: One of the barriers to saving is emotional spending, particularly after working hard. "The problem in this kind of society when you're working so hard, the way you feel better about yourself is to spend money. So it's like, I don't need the coffee, but I've been working like a dog for the last week, so I'm gonna buy the coffee."

Recognising and controlling emotional spending can help redirect funds into savings.

While there are clear challenges to saving money, including a lack of financial education and literacy, practical advice from Irish people highlights several strategies to improve saving habits.

Let us know some of your practical saving tips over on social media.