Overcome your spending instincts to start building your nest egg
We all know someone who is "good" at saving. The person who has always had a bit of money squirrelled away, even at university when everyone else was spending their rent money at the pub.
The good news is that even if you are not a natural saver, you can train your brain to get into the habit.
Part of the reason some people find it so hard to save money is a human tendency known as "loss aversion".
Research has shown we are twice as sensitive to the unpleasant feeling of losing something than we are to the more welcome sensation of gaining it.
If you see your pay land in your bank account, and then have to "lose" a chunk of it into savings, it feels like a loss. Similarly, businesspeople who receive income and then have to pay tax out of that sometimes find it more painful than those whose tax is taken from their salaries before they see it.
But by acknowledging that instinctual human loss aversion and working out how to tackle it, you can come up with a strategy to give your future self a reward down the track.
Sara Chatwin, a registered psychologist at MindWorks, said: "People like to feel they have control and can do what they want. If they commit to a savings plan, they feel they don't have as much choice or freedom."
But she said the answer was to start with baby steps. "The little bites that create a meal after a while. You're not constantly counting your pennies or constantly reminded you are saving, it's reflexive and it just happens.
"If you had $300 and put it in a savings account you might feel the hole in your pocket but if it's $50 a week, it's easier to deal with and it becomes $300 fairly quickly."
If you are the type of person who struggles with the rigour of putting money aside, there are some simple ways to start.
Stop thinking about it: If you decide you will save whatever is left over from your pay packet at the end of the week, you are guaranteed to end up with nothing.
The first rule of saving is that you need to pay yourself first. Work out a budget and decide on a reasonable amount, then set up an automatic payment so that it goes out of your account before you have even seen it.
This removes the pain factor of "losing" that money going into your savings.
David Boyle, group manager of investor education at the Commission for Financial Capability, said it was important money destined for savings was moved into the savings account as quickly as possible. "The longer it stays in the cheque account, the higher the risk you will find something else to spend it on. Out of sight is out of mind."
An automatic payment also removes your ability to decide what to spend each month and reduces the temptation to save a bit less on weeks when your favourite shop has a big sale.
If you can, use a savings account that does not display the balance on your online banking, to reduce temptation, or set it up so that you have to actually go into the branch to transfer money out.
Set a goal: Boyle says it is important to know what you are saving for. "A lot of people build up their savings and once they have a bit of money in there, they spend it on something they hadn't intended to. I see that happen all the time - a new suit or a new pair of shoes."
He said if savers had a clear objective it would help them to avoid incidental spending that would eat away at their balances.
Start now: It is easy to say you will start saving when you get a pay rise, after you have paid to fix the car or when you have moved house. But putting it off just means it will not happen.
Start saving now, whatever your circumstances, and make the most of compound interest that will boost your balance over time. Then, when you get a pay rise, you can increase your automatic savings payment and save the extra you get, again avoiding the dreaded feeling of loss.
Have more than one account: You might be saving for a holiday or a house deposit but you also need a savings account to cover the unforeseen emergencies that will arise. Set up an emergency fund - the equivalent to three months' wages is a good rule of thumb.
Financial commentator Janine Starks said it was good to have this reserve so that when things went wrong, you do not have to dip into your savings accounts or put the unexpected expense on an expensive credit card.
"You don't want to break long-term savings plans for a broken fridge."
Similarly, do not concentrate your savings in KiwiSaver. "It is too inflexible and locks you up with one manager until 65. High earners should have a range of other monthly plans with different fund managers. They should still be considered medium to -long-term but the reality is the daily liquidity gives flexibility to use the money."