New Delhi, Dhirendra Kumar. Many people save and many do not. It has nothing to do with investment. There are many people who do or don’t do anything else, but do it by saving rules. There are many who have nothing to do with any such rule. An interesting aspect is also that there is no relation with savings being more or less earning, it is purely a matter of habit. And changing habits is not easy. But it is true that small habits give amazing results. As far as savings are concerned, nothing can be more helpful for challenging times.
Why is it that some people are successful in saving and others do not. The thing to note here is that I am not saying why some people are successful investors and why some people are not successful investors. I am saying why some people save and some people do not save. And even if you save, then you do it in items like PF, NPS or Tax Saving. It is their compulsion to do so. Saving is not their choice, their choice. You must also have seen all this. For someone, saving is a kind of unwritten rule they never want to break.
There is nothing like this for many other people. I know that you can give many reasons for this and I can do the same. Many reasons may be true and many may not. It is also possible that it may have different reasons that apply to different people. But these things have no special meaning. And it is not very interesting either. The interesting thing is whether those who do not save can be converted into those who save. It is interesting to know what those who do not save when they get to know about this habit. Do they try to improve this habit? It is not easy to give up a long-standing habit. And this is a habit.
If you look at it, you will find that the habit of not saving and the habit of smoking can be very similar. And the habit of not saving has more to do with financial matters. This means that what we are talking about has more to do with human behavior and psychology. So overall, it is about giving up one habit and catching the other.
Preparing graphs of compounding returns and SIP growth is for those who are already saving. But this does not help much in turning non-saving people into saving ones. As far as the habit of something is concerned, from psychologists to those who write books on self-help, they have paid much attention to it. You may find it strange to mention those who write books on self help here. But my personal experience is that books written on self help help. A few years ago I wrote about a book. The name of the book was – The Power of Habit. The author of this book is Charles Duhig. In the book, it is told through short story and science that how our everyday behavior is determined in most cases by having or not having any habit. The book also explores in depth how it is formed and changed by habit. And How can a habit be adopted intentionally. Duhig’s book made me believe that saving in general is not a choice, but a matter of habit.
Shortly before, I read another book. This book has been written by sociologist BJ Fogg. Fogg is the founder and director of the Stanford Persuasive Technology Lab. It was later renamed Vihevier Design Lab. Fogg has written a wonderful book called Tiny Habits. The book deliberately talks about the process of deliberately adopting a habit. It is true that the story and the examples given in the book are similar to the way people feel uncomfortable in making a habit or leaving a habit. However, what Fogg said in the book is quite accurate in changing a person’s personal finance behavior.
It is difficult to explain here how Fog has described it. However, Fogg suggests three ways to change behavior. The first is to have a divine glow. The second way is to change the atmosphere. And the third way is to create small habits. Now it is clear that which of these three methods can be easily adopted. For those who do not save, it means that they just have to start saving. If you keep reading my column, then you probably also know that the first habit should be started by investing small amount through SIP. For those who have not done so yet, it is difficult to believe how a small change paves the way for a big change. Small habits can help a lot.