Ever found yourself saying, “I’ll save next month,” only to get to month-end with nothing left? You’re not alone. Most people want to save, but they struggle to turn that good intention into real action. Why is that?
Behavioral finance — the study of how we actually behave with money (not how we should) — gives us the answers. Here’s what it tells us, and how to overcome those common savings traps.
1. We Prefer Now Over Later
The trap: Our brains are wired for “instant gratification.” We’d rather enjoy money today than wait for a reward tomorrow.
How to beat it: Automate your savings. You can start small and save as you earn — before you spend it elsewhere. Making savings a habit removes the temptation to skip it.
2. We Fear Losing What We Don’t Understand
The trap: Many avoid saving or investing because they fear “losing money” — especially when they don’t fully understand how savings products work.
How to beat it: Start with low-risk options like a money market fund — it’s simple, earns you more than a current account, and is easy to access.
3. We Think Small Amounts Don’t Matter
The trap: “KES 200 can’t change my life.” So we spend it on impulse purchases and never build the habit.
How to beat it: The truth is, wealth starts small. Regular savings, no matter how little, build up over time. You’ll be surprised how consistency and compounding complement each other to increase numbers over time.
4. We Get Overwhelmed by Complexity
The trap: Saving plans, insurance terms, and investment jargon can be intimidating — so we do nothing.
How to beat it: Start small, by trying to understand the simplest concepts, one at a time. Ask questions, as many as you have – there are no silly questions when it concerns your money. And utilize channels that you feel explain things clearly enough in your language.
The Real Secret: Start, Then Stay Consistent
You don’t need to be rich to start — just ready.