Many people want to have a nice nest egg, secure their retirement, set money aside for college, or fund a large purchase with cash; they simply can’t figure out how to mentally commit to saving money. Often, putting money into savings, retirement, or investment account, while necessary, isn’t much fun. Since that’s the case, it’s hard to change your mindset and get onboard with the idea. Fortunately, there are ways to overcome barriers, making it easier to mentally commit to saving money. Here are some tips.
Don’t Call It a “Budget”
Budgeting is a critical part of the money saving equation. It gives you a plan to follow, ensuring you’re covering your expenses and setting aside enough in savings to achieve your financial goals.
The issue is, while having a budget is a smart move, the word “budget” conjures up feelings of being restricted or confined for many people. It’s simply how they view the term, not unlike how some people respond to the word “diet.”
If you’re struggling to stick with your budget – making it harder to achieve your savings goals – then some rebranding might be a necessity. For example, consider referring to it as your “financial success plan” or “path to financial wellness.” That lets you associate your budget with something positive you’re headed toward, which may be enough to help you mentally commit to saving money.
Add a Visual Element
For some people, seeing a dollar amount in a savings, retirement, or investment account isn’t particularly motivating, even if the balance is rising. If you fall into that category, then adding a visual element may make it easier for you to mentally commit to saving money.
One option is the classic approach you often see with fundraisers. Many fundraisers will use an image of a thermometer, and as they bring in funds, they fill it in to show the progress. Since the thermometer has segments, you can set mini-goals that may make the larger target easier to reach, which may also work in your favor.
You could also try a savings jar that you can put cash in during the month, allowing you to see exactly how much you’re setting aside. While you’ll want to deposit that money regularly, such as at the end of every month, having that visual representation of your efforts may keep you motivated.
In either case, consider adding in some other visual elements. For example, you could put a photograph that represents your goal next to the thermometer image or on the savings jar. That helps remind you why you’re saving and may make you more inclined to contribute funds whenever it’s possible.
Also, place you’re preferred visual representation of your savings in a prominent place in your home. Ideally, it should be in a spot you pass several times a day. That way, it stays at the top of your mind.
Get a Savings Buddy
In some cases, feeling supported by someone else can make it easier to mentally commit to saving money. Having a cheerleader helps you stay excited about going after your goal, increasing the odds you’ll want to make progress quickly.
Additionally, when you have a savings buddy, you’re accountable to someone. By choosing a person that you want to make proud, you may also have an easier time committing to saving regularly.
If your savings buddy also has their own goals, be their champion, too. That way, the support and accountability go both ways, allowing you to help each other. It essentially adds a beneficial social element to savings, which may be enough to keep you on target.
Have a Reward System
While hitting a savings goal can be its own kind of reward, if you’re focused on long-term targets, you won’t experience that for quite some time. In some cases, that can make it seem like you aren’t seeing anything positive for your efforts, which is disheartening to many people.
If you’re struggling to mentally commit to saving money, create a rewards system. Ideally, the rewards need to be incredibly low-cost, and they can’t involve removing cash from saving to get them. Options that could work include going out for fancy coffee, buying a gourmet candy bar, picking up a new nail polish, renting an on-demand movie, cooking a nicer-than-usual meal at home, or something similar. Just make sure you can cover the cost with your usual spending money.
Have a Plan for Fun Money
Being overly restrictive when you’re saving money can actually backfire. While it gives you more room in your budget, you might get frustrated with the arrangement incredibly quickly. If that happens, you might end up abandoning all of your savings activities because you believe it’s making you miserable.
Ideally, you want to have some room in your budget for some niceties. However, it needs to be part of your plan, not something that happens on the fly.
When you create your budget, add a line item for “fun money.” Consider that unrestricted cash that you can use on splurges. Just make sure that, once that money is gone, that kind of spending ends until the next month or paycheck (depending on how your budget is set up). That way, you can treat yourself on occasion without derailing your other financial plans.
Use Automation to Your Advantage
In some cases, the best way to ensure you’re setting money toward your goals is to remove as much of the mental aspects as possible. By automating your savings activities, setting money aside simply becomes a part of your life. You don’t have to think about it at all; it just happens.
Employer-sponsored retirement accounts are a perfect option if you need to save money for your golden years. In many cases, your company can whisk the cash out of your paycheck before any money hits your bank account. Since it happens before you receive any funds, you’re saving without any ongoing effort.
Automatic transfers out of your checking account are another excellent option. With this, you’ll want to time the transfers based on when your paycheck arrives. That way, it’s one of the first deductions from that money, ensuring it’ll go through before you start spending.
Usually, you can set up automatic transfers for a wide range of deposit types. For example, you could send money from checking to savings, fund a brokerage account, or purchase investments in many cases, depending on your bank, credit union, or investment platform.
Do you have any tips for those struggling to mentally commit to saving money? Have you used any of the approaches above and want to tell others about your experience? Share your thoughts in the comments below.
Read More:
- Why You Should Start Saving Money for the Future
- 20 Saving Money Quotes for 2022
- Can Saving Money Be Bad for You?
Come back to what you love! Dollardig.com is the most reliable cash back site on the web. Just sign up, click, shop and get full cash back!
Tamila McDonald is a U.S. Army veteran with 20 years of service, including five years as a military financial advisor. After retiring from the Army, she spent eight years as an AFCPE-certified personal financial advisor for wounded warriors and their families. Now she writes about personal finance and benefits programs for numerous financial websites.
Comments