Dissaving: What It is, Reasons for It, Example
Gull Rehman
10/10/20234 min read
Have you ever spent more money than you earned? If so, you're not alone. Many people find themselves in this situation from time to time. But what if it becomes a habit?
What if you're spending more money than you earn on a regular basis? This is known as dissaving.
Dissaving can be a dangerous habit, as it can lead to debt and financial hardship. In this blog post, we'll discuss what dissaving is, why people dissave, and how to avoid it.
What is Dissaving?
Dissaving is the opposite of saving. It means spending more money than you earn. This can be done by dipping into your savings account, using credit cards, or borrowing money.
Reasons for Dissaving
There are many reasons why people dissave. Some of the most common reasons include:
Unexpected expenses: Unexpected expenses, such as medical bills or car repairs, can throw off your budget and lead to dissaving.
Poor financial management: Poor financial management skills, such as not budgeting or not tracking spending, can also lead to dissaving.
Lifestyle inflation: Lifestyle inflation is when your spending increases as your income increases. This can lead to dissaving if you're not careful.
Debt: Debt can be a major burden on your finances and can lead to dissaving. If you're making high-interest payments on debt, you may not have enough money left over to save.
Lack of financial planning: If you don't have a financial plan, you may not be aware of how much money you're spending or how much you need to save to reach your financial goals. This can lead to dissaving.
Example of Dissaving
Here's an example of dissaving:
Sarah earns $5,000 per month. Her monthly expenses are $4,500. This means that she has $500 left over each month to save.
However, Sarah loves to shop and often spends more money than she has budgeted. As a result, she doesn't have any money left over to save at the end of the month. In fact, she often has to use her credit card to cover her expenses.
Over time, Sarah's credit card debt accumulates. She starts making high-interest payments on her debt, which makes it even more difficult to save.
Sarah is dissaving because she is spending more money than she earns. This is a dangerous habit that can lead to financial hardship.
How to Avoid Dissaving
There are a few things you can do to avoid dissaving:
Create a budget: A budget is a plan for how you will spend your money each month. Creating a budget will help you track your spending and make sure that you're not spending more money than you earn.
Set financial goals: Having financial goals will give you a reason to save money. Once you know what you're saving for, you'll be more motivated to avoid dissaving.
Automate your savings: One of the best ways to save money is to automate your savings. This means setting up a recurring transfer from your checking account to your savings account each month. This way, you'll save money without even having to think about it.
Pay off debt: If you have debt, make a plan to pay it off as quickly as possible. This will free up more money for you to save.
Get professional help: If you're struggling to manage your finances or avoid dissaving, consider getting professional help from a financial advisor.
I used to be a dissaver myself. I didn't have a budget, I didn't have any financial goals, and I didn't have a plan to pay off my debt. As a result, I was always living paycheck to paycheck.
One day, I realized that I needed to make a change. I was tired of being broke and I was tired of living in debt. So, I decided to create a budget and set some financial goals.
At first, it was difficult to change my spending habits. But after a while, it became easier. I started to see my savings account grow and my debt decrease.
Today, I'm a proud saver. I have a budget that I follow religiously, and I have a plan to pay off my debt in the next few years. I'm also saving for a down payment on a house.
If you're struggling to avoid dissaving, I encourage you to seek professional help. A financial advisor can help you create a budget, set financial goals, and develop a plan to pay off your debt.
Tips for Beginners
Here are a few tips for beginners who are trying to avoid dissaving:
Start small. You don't have to start saving a lot of money all at once. Even saving $20 per month can make a difference over time.
Make saving a priority. Schedule time each week to review your budget and make sure that you're on track to meet your savings goals.
Automate your savings. Set up a recurring transfer from your checking account to your savings account each month. This way, you'll save money without even having to think about it.
Pay yourself first. As soon as you get paid, set aside money for savings before you pay any other bills or expenses.
Cut back on unnecessary expenses. Take a close look at your budget and see if there are any areas where you can cut back on spending. This could include eating out less, canceling unused subscriptions, or shopping around for better insurance rates.
Conclusion
Dissaving is a dangerous habit that can lead to financial hardship. However, there are a few things you can do to avoid dissaving, such as creating a budget, setting financial goals, automating your savings, paying off debt, and getting professional help.
If you're a beginner, start small, make saving a priority, automate your savings, pay yourself first, and cut back on unnecessary expenses
