Why Is It So Hard To Save Money?
Making money is hard. Keeping it is harder. No matter how much it's drilled into our brains to save, save, save, the income we earn seems to flow into our bank accounts just as quickly as it flows out. The fact is, about 40% percent of Americans who earn over $100,000 a year can't seem to save, according to a GoBankingRates survey. Sure it's important to save for emergencies, but the goal is to have enough to invest, so that we earn much more and work much less—maybe even not at all. It sounds great, in theory. So why is the struggle to save so real?
Our brains could be to blame
Really. A team of neuroscientists at Cornell University found that 90 percent of participants in their study chose to earn more than they save. Because the emphasis on making money seems like an effort all its own, when it comes time to put the money into a savings plan, we're spent, if you excuse the pun. "It's rational from the brain's perspective: You must earn before you can save," Adam K. Anderson, associate professor at Cornell University's College of Human Ecology and co-author of the report, tells CNBC. "It could partly be cultural," he says. "We brag about work ethic and earnings, but we don't talk about coming up with a cool savings plan."
Our goals are too abstract or long-term
The other issue is that earning money provides an immediate reward, while saving that money is only rewarding in the abstract and hinges on future plans—buying a house, retiring—which may feel like pipe dreams when you're scraping to save.
One thing you can do is set up mini-milestones that feel actually feasible in the short-term—think buying a new appliance, taking a vacation or redoing your closet. Saving enough to reach smaller, more accessible goals gets you in the habit of saving period. And that's a whole lot better than not saving at all.
We have instant access to shiny things
It's not just you. 79 percent of Americans shop on their phones or laptops, with 15% buying stuff online on a weekly basis, according to a recent Pew Research study. When you can purchase anything with the click of a button, you're less likely to feel the immediate impact of your purchase on your bank account.
Social media makes our shopping impulses even harder to turn off. Between Facebook ads and Instagram influencers, we're bombarded with dangling carrots we think we need in the moment.
"We are socially comparative creatures by nature," psychologist and authorNancy Irwin tells MarketWatch. "[People] feel inferior if someone they know has a shinier or bigger toy than they do."
One thing to do is delete your auto-saved credit card from e-commerce sites you frequent so that it's harder to shop instantly. You might consider taking a break from Paypal, ApplePay and other insta-payment sites so that you're forced to manually enter your information before you shop. That lag time could make all the difference.
All those subscription services are killing us
Technology doesn't just suck you into one-time purchases, but monthly subscriptions as well. So all those creature comforts like Netflix and Spotify that we've come to rely on add up to more bills we often forget about. "Our issue is we're spending before we even save and then never look back," Brandon Hayes, a financial planner, tells MarketWatch. "With a cashless society, it's tough to appreciate a dollar when you never see one."
Creating a monthly budget and reading your credit card statements closely will both help you eyeball your spending habits and weigh your options about subscription services that may not be worth it to you in the long run.
We never know when the next paycheck is coming
In a gig economy with over 53 million freelancers, it's hard to feel entirely confident when and from where your next paycheck is coming. That makes signing up for an automatic savings plan seem riskier than it might be if you had a steady, unfluctuating income. One thing to consider is a no-fee online savings account you can dip into when needed.
You can set up micro-auto-payments just to get into the habit of socking money away and up the number as your workflow builds. There are also micro-saving tools that allow you to transfer as little as $1 from your account—as much as a cup of coffee. Setting up daily auto transfers of a buck may seem like petty cash at first but it adds up over time.
We just can't afford to
Between credit card debt, student loans, the rising costs of rent and bare necessities, 65% of us aren't saving a penny—and our biggest problem is our expenses. The best thing to do is to create a budget.
There are some easy-to-use online budgeting tools that make the task much less daunting. This will help you figure out how much is going in and out of your account, and ultimately where you can cut the fat so that you have a little bit leftover to sock away.
The whole thing gives us anxietyIn a world with too many options, even when it comes to choosing a savings plan, where do you start? The good news: technology is not totally the enemy. There are plenty of online resources that have done the work for you. Here's a breakdown different types of savings plan to decide which one is right for you. And here are some questions to ask yourself before you dive in head first. A little research will give you the confidence to hone in on your own research and set up an account that makes the most sense for your situation.
Looking for a job? In addition to encountering those annoying never-ending job interviews you may find yourself face-to-face with an artificial intelligence bot.
Companies worldwide increasingly use artificial intelligence tools and analytics in employment decision-making – from parsing through resumes and screening candidates to automated assessments and digital interviews. But recent studies claim that AI does more harm than good.
While AI screening tools were developed to save companies time and money, they’ve been criticized for placing women and people of color at a disadvantage. The problem is that many companies lack appreciable diversity in their data set, making it impossible for an algorithm to know how people from underrepresented groups have performed in the past. As a result, the algorithm will be biased toward the data available and compare future candidates to that archetype.
The City’s Automated Employment Decision Tools (AEDT) law is designed to offset the potential misuse of AI and protect job candidates against discrimination. It was enforced on July 5th, 2023 in New York City - with other cities and states expected to gradually follow suit. Employers must now inform applicants when and how they encounter AI. Furthermore, companies have to commission a third-party audit of the AI software used, and publish a summary of the results to prove that their systems aren’t racist or sexist. Job applicants are able to request information regarding what data is collected and analyzed by the AI. Violations of the law can result in fines of up to $1,500.
Replacing Human Hiring Decisions
However, should a job applicant want to opt-out of such impersonal judgement by a bot, the new law's scope is quite limited.
While the law specifies that instructions for requesting an alternative selection process must be included in the AI screening disclosure, companies aren't actually required to use other screening methods. Not to mention that the law only applies to AI in hiring and not any other employment decisions. It also wouldn't apply if the AI, for example, flags candidates with relevant experience, but a human then reviews all applications, making the ultimate hiring decision.
Some civil rights advocates and public interest groups argue that the law isn’t extensive enough and that it’s even unenforceable. On the other hand, businesses say that it’s impractical, costly, and burdensome, and that independent audits aren’t feasible.
Responsible use of AI in hiring
Although this law may be a good first attempt to assign more regulatory guardrails around AI, it remains to be seen if it ensures the responsible use of AI in hiring processes. At the end of the day, perhaps recruiting talent should remain a human-made decision.
The good news is that AI can help companies without harming potential job candidates in many ways – such as connecting new employees with internal organizational information and company benefits during onboarding. Or helping employees to do their jobs more effectively rather than replacing them.
There’s all this talk about solo travel. And for good reason — no wasting precious time waiting for others to get their act together, take the plans out of the group chat and actually buy the tickets. Going solo, you can be spontaneous. You can plan your trips according to your precise tastes. You can hop on any flight and fly awayyyyyy.
But what if each time you flew you’d get a free ticket? That’s what you get with the Southwest Companion Pass.
Award status, upgrades, lounge access — there are many perks in the frequent flier game. But one of the coveted holy grails is the Southwest Companion Pass.
What is the Southwest Companion Pass?
The Companion Pass is part of Southwest’s Rapid Rewards program. You get to choose one person to be your “companion,” and they fly with you for free (plus some taxes and fees) on every flight. That’s right. Two for the price of one. That’s half off each ticket if you split it! Whether you’re flying with a partner, family member, friend, or anyone else, they can tag along for free.
And it gets better: once you earn the pass, you can reap the rewards for that full calendar year … AND the next. That’s why people go mad trying to earn a companion pass during the early months of the year. The sooner you qualify, the longer you can use it.
There are also no blackout dates. There are no limits. And if you didn’t purchase the ticket (think: work travel, your companion, or a generous benefactor), there are no restrictions! As long as you’re the one on the plane, your companion can also … be on the plane.
You can also switch out your designated companion 3x a year. So, no need to stay in a relationship simply to get the most out of your companion pass! Ghost and fly away — with a whole new companion!
If this sounds too good to be true — it’s not. But there is one small catch. It’s kinda tough to earn this mega reward.
How to qualify for the Southwest Companion Pass?
You can qualify for the pass in one of two ways:
- Fly 100 qualifying one-way flights
- Earn 135,000 qualifying points in a calendar year.
Clearly, this is no small feat — especially if you’re trying to qualify ASAP.
So how do you actually earn the Southwest Companion Pass?
Don’t worry, there’s a path to earning this amazing reward without climbing on 100 flights or spending an exorbitant amount of money.
Earning 135K reward points may seem completely impossible, but it’s easier than it sounds. Simply sign up for a Southwest Credit Card and turn those spending habits into a rapid rewards account. Through the Rewards Priority Credit Card, earn points when using local transit and commuting, plus score major points and miles whenever you spend.
Stay with me here. This is not some scheme to get you into credit card debt. Many airline cards come with potential savings, giantic rewards, awarding you points, and cashback with every purchase you make that can be redeemed for travel. And often they can come with passive sign-up bonuses. If you spend a specific amount of money within a certain timeframe of opening the card, you can be in for a windfall of points.
Now that’s where the companion pass comes in:
- Southwest Rapid Rewards Premier
- Southwest Rapid Rewards Plus Credit Card
- Southwest Priority Credit Card
- Southwest Rapid Rewards Premier Business Credit Card
- Southwest Performance Business Credit Card
Southwest has three personal cards and a business card. Each of these cards offers rewards between 30K-80K points. In the past, people could open two cards and get a bonus that granted enough points to almost meet the minimum. However, with new restrictions on personal cards, you can only get one bonus every 24 months. Boo!
However, this doesn’t apply to business cards. If you’re eligible, have good credit, and not likely to spiral into insane credit card debt, you can open a business card and a personal card, and accrue 100K+ points. The Rapid Rewards Priority Credit Card will get you points after you spend money in no time.
Now to earn the rest of them.
The secret to gaining these credit card points is to plan your card sign-ups around big purchases. Just before a recent move, I opened a card . . . and the rewards came rolling in — a small balm to ease the pain of how exorbitant moving can be.
Put everyday spend — especially big purchases or bulk items — on your Southwest credit card and watch your award points quickly add up. Typically, you earn 1 point per $1 spent on your Southwest card and 2 points per $1 on actual Southwest purchases.
But there are other ways to earn points, including:
- Flying Southwest: Booking travel on Southwest earns more points. The cost of this travel will be worth it with your companion pass
- Shopping from Rapid Rewards Partners: Purchases with Southwest’s “Home & Lifestyle” and “Shop and Dine” Partners also earn Companion Pass qualifying points. While you shouldn’t make gratuitous purchases, browse Southwest’s partners to see if you could earn extra points for items you'd be purchasing anyway. All this, simply from enrolling in their Dining Program and shopping with their partners.
So there you have it! And since it’s almost Spring, get to earning and soon you’ll be flying two for the price of one!