Let’s say you find saving money very difficult. Not a very unusual thing. Almost every family in the lower and middle-income segment faces this one issue.
And regardless of the many saving approaches you try to follow, no matter how religiously, they always fail to bear any fruits for you. You look for ‘hacks’ to save money. ‘Tricks’ to manage your money better. And some magical way to increase your bank balance. And as funny as they might sound, mind you, the search volumes for these phrases are extremely high.
So now the question arises – even when people want to save money, why is it such a daunting task? And why we always shrug off any savings-related talks, with the most common words – not my cup of tea?
One immediate reason that comes to mind is our undying love for spending. Which leaves us with little money. Hence the question- how can I save when I don’t have any money?
We, as humans, are wired to follow the path of least resistance. We tend to go down the route which allows us to combat lesser processes and give us more freedom. And rather than trying to change that, we should actually try to capitalize on it. But given that it’s not a very easy thing to do, how should you actually go about implementing it?
Well, this is where automation saves the day. Automating the money habits of people, without asking them to deviate from their preconceived notions is what’s needed today. Basically, aligning the ideology behind the products to the day-to-day habits, most of us have. No matter how much we try to force people into saving, it isn’t going to happen. So rather than asking people to do something they’re not wired for, the ideal-case scenario should be why not bank on things which are already there. And the easiest of them is the spending power of humans.
Our spendthrift nature is very deeply ingrained in us, with the types ranging from an impulsive shopper to an extravagant spender. And there can be many reasons that define this behaviour of ours – the feeling of insecurity, a materialistic approach to life, peer pressure, etc. But what’s probably the worst is a lack of or ignorance towards financial intelligence. And this is the core challenge almost every financial institution is trying to tackle today. And a lot of them have actually come up with very innovative and intuitive products to help the cause.
This might sound easy, but such daunting tasks can be taken care of by various fintech applications like Groww, Paytm Money and Zerodha as they help you invest your money directly into mutual funds. But if you happen to be the one who has little or no financial literacy than a fintech app like Sqrrl is your way forward. And the perfect way to define the approach is – the more you spend, the more you’ll actually save.
We find it easy to deal in multiples of 100 (or such a well-rounded figure) and round-up numbers in our minds every day. To put this into perspective, say you make a purchase of coffee at your favourite cafe and pay Rs 186. In your mind, you round up your coffee spend to Rs 200. Bought a shirt for Rs 1160? In your mind, it’ll be registered as Rs. 1200 spent on the shirt. So their idea is, every time you make a purchase, the remaining amount, to the next multiple of 100, gets automatically invested, into a fund of your choice, without you taking any efforts.
Many times the processes that are the easiest to improve and automate are also the most manual and hectic. A repeatable, organized and transparent automated process not only removes the obstacles but also, in the case of finance specifically, reduces the risk factor. Hence, taking simple yet powerful automated approaches to simplify the lives of people, by banking on their very nuances, will define the way forward, for a more financially inclusive world.