Saving up is hard to do… sounds like a song doesn’t it? But just like a lot of other worthwhile habits we should all do more of, saving can be boring. It also can be too hard to do right now, which is a convenient excuse to put it off until tomorrow or maybe start next month.
So how do we make saving fun?
Start by realising that there are great reasons to save, other than for retirement. The type of fun saving we are talking about is the short-term savings. I know it is just as easy to pull out the credit card but humour me and give this a go.
Let’s start with why we don’t save. For most of us it just isn’t fun. Our brains are wired for instant gratification and we want everything now!
But back up the bus, think about anticipation (nothing to do with the Rocky Horror Picture Show). Anticipation can increase your enjoyment. And anticipation means we’re looking toward to achieving a goal, which means dopamine kicks in and gives us a surge of reinforcing pleasure when we’ve achieved it! A double whammy!
So, start imagining yourself on the beach in some exotic location or seeing yourself luxuriating on your lovely new sofa or doing a Gordon Ramsey in your brand-new kitchen (yes, drop in the odd swear). Combine that with seeing your bank balance grow and you will soon get very excited about saving.
We also put off saving because we don’t know what we are saving for. Saving just for the sake of it seems a bit meaningless. If you don’t have a goal (or Focus) on what it is you want, it really doesn’t matter what you do with your money. So, you now have another reason for not saving.
Once you decide you want something (the motivational gurus call this a goal…), you’ll get very Focussed. Pin back your ears and you’re off like a racing rabbit, before you know it, your savings account is bubbling.
We don’t save because we lack self-control. Sounds a bit harsh but true. We don’t stand in a store and think about what we can’t do if we spend the money now. In other words, we don’t think about the opportunity cost.
Learn to say No! to yourself. No, I don’t want the T-shirt right now, I would rather enjoy a cocktail on the beach while I am on holiday (or buy a souvenir T-shirt that you never wear).
To become a successful saver, you need to get your mind into savings mode. To do this you need to,
- Have a clear goal, so you can Focus on whatever it is you want.
- Visualise enjoying the whatever it is now, and you will find it easier to continue to save.
- Learn to say NO to yourself and practice a bit of self-control and delayed gratification.
Now you have your head right, this is what you do,
- Start small, set yourself a 90-day savings goal. What can you save for in the next 90-days? It doesn’t have to be a large amount of money, if you are new to this, start with a small $ goal.
- Open up a new savings account. Give it a fun name to link it to your goal. ‘My Beach Holiday’ account sounds much more exciting than ‘savings 25 account’.
- Work out how much money you need in your account to achieve your goal and divide that by the number of days (e.g. 90). For example, if your goal is $500 for a weekend away then on average you need to save $5.55 per day.
- Now you know your number, learn to say No to yourself. When you say, “Nope, I won’t have a muffin with my coffee today,” whip out your phone, go to your banking app and transfer the price of the muffin to your savings account. To add a bit more fun, in the reference you might want to add, “I said no to a muffin!” or “I said no to the T-shirt.”
- Once you have mastered the 90-day goal, keep going, set bigger targets for yourself and have fun saving.
You will be surprised how your behaviour changes with your money once you have a clear Focus on what you want and set out to achieve it. Remember, the dopamine will be kicking in.
Our programmes are designed to help you understand why you do what you do with your money and how to change not only your behaviours, but your mindset as well.
If you want this year to be different, talk to us about making changes that last.