Understanding Your “Why”: How to Stay Motivated to Save
We get it: saving money is hard. Each of us has a limited pool of income to allocate towards both our financial responsibilities and our wants - once your fixed bills are covered, it can be really tempting to spend your extra cash on non-essentials like coffee, meals out and online shopping.
However, if you’re constantly spending every penny of your paycheck, it’s likely you aren’t paying enough attention to saving. Neglecting to save can have a variety of negative consequences, like being unprepared for a financial emergency, paying thousands in interest fees, regular financial stress and more. It’s in your best interest to be saving a healthy portion of what you’re earning each time you get paid.
To save effectively, you need to have a clearly defined financial goal. It could be becoming a homeowner, going on a trip around the world or getting out of debt. But, whatever your goal is, it’s important to think deeper and determine what your “why” is too – that is, the reason you want to achieve this goal. For example, many people want to become homeowners, but want it for a variety of reasons: to gain the security of owning your own property, to provide a home for a growing family, to be able to freely decorate your living space and so on.
You can think of your “why” as your secret weapon when it comes to saving money. By having a “why” you can remind yourself of daily, you’ll be able to focus on the big picture instead of getting distracted by small purchases. This is particularly helpful for people who feel they’ve never been able to save money well. It’s been reported that 83% of people who create and follow defined financial goals feel better about their financial situation in just one year. It’s effective because it’s highly personal – nothing is going to motivate you to change your behaviour more than what you really want. Beyond that, it’s not just the surface goal that’s driving you, but the underlying reason you want to achieve it as well.
You can have numerous financial goals, but it’s best to narrow down to only one or two primary goals within each of your short-term, medium-term and long-term futures if you can. If you have too many goals at once, you’ll have to split your attention and resources thinly between each. This can be a huge motivation killer, as if you’re making a ton of effort with saving but you aren’t achieving any of your goals, the act of trying of reach them can become exhausting. Instead, having only a few on your plate at a time means you can focus and more efficiently reach your goals, then move on to the next ones on your mind.
If you’re not sure what your primary goals should be, try this exercise from Warren Buffett as described in Angela Duckworth’s book Grit: The Power of Passion and Perseverance. This exercise was originally described in terms of career goals, but it might also be useful in helping you get focused about what you’re trying to achieve with your money too:
”1. Write down 25 financial goals you’d like to accomplish.
2. Do some soul-searching and narrow it down to just 5.
3. Take a good, hard look at the 20 goals you didn’t settle on – avoid these at all costs. These are what distract you, eating away your time, energy and resources and taking your focus away from the goals that matter the most.”
Expanding on this exercise, once you have your 5 primary goals, it’s still important to ask yourself why you want to achieve them. Most of us want a large number of things, but some have more purposeful meanings than others. You might find that the time it’ll take you to save for the aesthetic upgrade of a brand new car isn’t as valuable to you as putting that money towards an epic family vacation instead. If your “why” isn’t clear, or you realize something isn’t really worth the effort it’ll require from you, you’ll need to go back to the drawing board to see if one of the other goals in your list is more aligned with what you really want.
Once you’ve got your “why” sorted out, here’s a few tips that’ll help you concentrate and grow your savings faster:
• Automate and separate your savings. Having a dedicated fund for each of your goals and automating the savings towards each is one of the most effective steps you can take to make consistent progress towards achieving your financial goals. Automating your savings means you won’t short-change your goals each pay day (or forget to save entirely), and separating them from your day-to-day account creates an additional barrier you have to consider before spending. It can be extremely motivating to watch your balance grow in each fund, and you’ll notice that as you steadily grow closer to achieving each goal, you’ll feel your focus and desire to achieve them get stronger.
→ A great way to do this is to create Saving Jars or Challenges for each of your primary goals within QUBER! You can easily separate your savings according to goal, automate a different amount to save each pay period for each and keep each separate from your primary bank account so you aren’t tempted to spend. To download the app and start saving, click here.
• Celebrate your milestones! If you’re trying to achieve a large goal, it helps to break down that figure into smaller milestones you can more easily achieve. For example, $10,000 sounds like a great deal of money to save, but $333 a month (over two and a half years) sounds much more achievable. This is a helpful mental trick that can minimize the feeling that you’ll never get close to achieving your total. Plus, as you make progress towards your goals, give yourself credit where credit is due. If you’ve struggled with saving your whole life and you manage to put $1000 away towards one of your goals, mark the occasion! It might mean spending a small amount to treat yourself, or it might mean sharing the news with people who will be proud of your progress. Ultimately, don’t forget that when it comes to saving, you’re both your own greatest enemy and best friend. Lean into the positive side and be supportive towards yourself like you would be towards a friend!
• Create a visual reminder of your “why” for yourself. Don’t underestimate the power of a visual when it comes to keeping you focused. Whether it be something elaborate, like a vision board with pictures of what you want to achieve or something simpler like a post-it note on your fridge, seeing the outcome you want to achieve each day with your own eyes can help snap you out of a spending mindset and remind you to say no to non-essential purchases.
• Build your emergency fund. Life happens – you can’t be sure when, but it’s inevitable that you’ll eventually need some liquid cash to help cover the costs of an unexpected event like a car repair, a vet bill or a sudden loss of income. If you don’t have a dedicated emergency fund, you’ll need to pull from your goals to help cover yourself when this occurs. Instead, building an emergency fund simultaneously will mean you have a source of cash to rely on and you can leave your goals untouched.
→ Another area QUBER can help! Starting an emergency fund is easy within QUBER and helps keep your fund at arm’s length, encouraging you to keep saving instead of using the money on non-essentials. Click here to download the app.
• Don’t beat yourself up if change isn’t instant. It takes time to truly change any kind of ingrained behaviour, and overspending is no different. If you haven’t traditionally been a successful saver and you indulge in a moment of weakness, don’t let it completely knock you off track! Just wake up the next morning motivated to take a step forward with your saving goals.
