As an individual living in Pakistan, saving money seems like a fever dream that we will never get to make into a reality. Our savings accounts gather dust while we sit there helplessly, stressing over our economic state.
What if an unexpected celebration(weddings being the most common here) comes up that we have to attend? What if there’s a medical emergency that risks accumulating debt? These questions and many more show that saving money is extremely important to live a stress-free life, without having the constant worry of our wallets being empty.
However, many reasons contribute to the people in Pakistan struggling to save money, which include:
1. Lack of budgeting
Staying organized can work wonders when it comes to saving money, but nowadays, everyone seems to run away from it. The decrease in healthy budgeting habits leads to us having less control over our expenses, making it severely difficult to prioritize saving.
This can be prevented by:
- Creating a budget: Be it with just a pen and paper like our ancestors used to, or using fancy tools, having some layout of our finances will help to stay aware, giving us the time to think about allocating funds to saving money.
- Monitoring and adjusting: Your budget doesn’t have to be set in stone. Some months, you may spend way more on your groceries than others, but that can always be fixed in the next month. Just keep on track and you will start feeling lighter in no time!
- Automating your savings: It’s understandable that putting money aside to save when there are a dozen desires to act upon is difficult, but setting up an automatic transfer to our savings account does the work for us and allows us to navigate the rest of our money better.
2. Retail therapy
In a bad mood? Buy a little treat. Bored? Buy a little treat. Feeling any sort of negative emotion to ever exist? Take a guess.
It’s been scientifically proven that indulging in impulse buying leads to the release of dopamine, which is essentially just happy juice for your brain. While flowing money away DOES help you to calm down in difficult times, the anxiety of the dent in your bank account that comes afterward is really not worth it.
Savings will always cease to exist if we keep acting on our urges, and there are ways to combat them:
- Identify triggers: Try to stay more mindful of your mental state and point out the feelings(stress, boredom, etc.) that lead you to make impulsive financial decisions. This way, you become more cautious the second you start to feel them and can prevent yourself from making any rash decisions.
- Using the 30-day Rule: Subject yourself to a waiting period of 30 days before buying something of high value and cost. The time will allow you to reflect on your urge and will provide a boundary while spending money, leading you to set more of it aside to save.
- Delete shopping apps: Pakistani advertising companies do an amazing job of giving their customers the illusion of things being cheaper than they actually are using “deals” and “sales”. While some of these sites and apps do provide appropriate shopping options, many of them just scam and delude us into thinking that we need a product when we really do not. Deleting these sources will take us out of unrealistic fantasies and allow us to make better financial choices.
3. High debt levels
How can we even think about saving money when we are already crushed under a mountain of debt? Due to the increasing prices of goods, even buying a simple appliance can cause us to take up numerous loans.
Moreover, we can’t run from taking them since they are needed to improve our lifestyles bit by bit. However, we can work towards paying them back more efficiently to escape the overflowing interest rates.
This can be done by:
- Using the Debt Avalanche Method: Focus on paying off the debts with the highest interest rates first. This helps to reduce the overall money paid, saving it in the long run.
- Cutting expenses: Try to spend less on your “wants” so that you can focus more on paying off your debts. Having an impulse take over from time to time isn’t a crime, but reducing them will make up space for you to look into your savings as well.
4. Increased inflation:
Over many years, inflation rates in Pakistan have continued to touch the sky, making it difficult for people to even think about their savings since they are always busy worrying about their existing financial catastrophes.
With the prices of basic necessities progressing rapidly, we need to take steps to fight inflation by:
- Reducing consumption: If we buy less from companies, they’ll likely decrease their prices to gain engagement with their products/services, or at least refrain from increasing their prices further.
- Increasing income: Matching the pace with inflation is crucial. Try to find side hustles or investments to diversify your income, allowing more area for your savings to flourish.
5. Fluctuating currency:
As we know well, the Pakistani rupee has been losing value for a while which continues to lead to the erosion of purchasing power. People get discouraged when it comes to savings because they know that their money won’t have any value in a short amount of time anyway.
Though we can’t prevent this issue directly, we can take measures to lessen the damage it causes by:
- Avoiding unnecessary conversions: The exchange market is always a roller coaster to be on, so step back from consistently converting your currency as it may lead to unexpected losses.
- Investing wisely: If you are considering investing as a way to increase your earnings, do so in assets that are stable in PKR, like property or gold. This will allow you to stay safe from the degrading currency value, and allow you to have money(in some form) saved up for the future!
CONCLUSION
The circumstances are pretty stark right now for the people trying to survive in Pakistan. Saving money is overshadowed by many other hassles. However, we need to understand that it is an aspect of our finances that we need to manage sooner or later in order to live comfortably.
We need to hold our composure and fight to start stabilizing our economic state. So start making your budget, control your impulses, and most importantly, stay hopeful.
No matter the amount of reasons why you haven’t been able to save money in the past, you’ve been given the tools now. Just start applying them to your life and watch your savings skyrocket with ease.
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