Squirrels have it easy. They have a natural instinct that tells them, “Hey, you need to start saving food right now if you want to make it through the winter.” It’s a behavior that’s born into them. They don’t have to motivate themselves to find nuts and stash them away. They just do it.
As humans, we have many natural instincts, but saving money is rarely one of them. In fact, saving money is often at odds with our instincts. That’s because saving money doesn’t really trigger any sort of positive physical or psychological response, whereas spending money can, and very often does, trigger feelings of belonging, safety, comfort, etc.
That’s why saving is a hard habit to form. But it’s not impossible. The trick is to understand your personality and create a savings strategy that fits your routine, rather than re-writing your routine to oblige your savings strategy.
Some people are hardwired to be competitive. As in, all the time. If you find yourself timing your trips to the grocery store in search of a personal best, you might find saving easier if you turned it into a game or competition.
If you’re doing it alone, that might take the form of setting personal challenges every month. Create a goal and then try and top it the next month. Focus on specific areas of your budget and set spending goals that require you to be frugal and creative in order to hit the mark. Just remember – reducing your expenses isn’t the same thing as saving money, so don’t make the mistake of letting those savings leak out into other expenses.
If you can, though, try to make savings a competition between friends and family. Create prizes for whoever can spend the least or save the most. That way you can build your savings and earn some big time bragging rights at the same time!
If you spend $30 on takeaway Chinese food, you have something to show for it: a large pile of Chinese food, which you can then eat or simply admire (I don’t pretend to know your relationship with Chinese food).
If you spend $10 on groceries and put the other $20 into savings, you have something to show for the $10 (dinner, albeit dinner you have to make yourself), but nothing to show for the $20. It hasn’t disappeared, mind you, but unlike the big pile of Chinese food, the investment isn’t right in front of you. It’s not apparent. In other words, you don’t get any sort of immediately satisfying response from saving money. It just feels like you didn’t get what you really wanted.
Of course, in the long-term that $20 can turn into any number of things substantially better than Chinese food (no offense intended to Chinese food). But in the moment it’s hard to feel that.
One way you could potentially bridge that gap is by creating a visualization of your savings goals. If you can see that yes, this momentary sacrifice is bringing you closer to something you really want – a vacation, a new car, a house – it might help create a sense of satisfaction when you make choices that bolster your savings.
It might sound hokey to draw an outline of a big car, let’s say, and slowly fill it in as you approach your goal, but a visual representation of your progress can make a huge difference, especially if saving money doesn’t give you the immediate thrill you need to stay motivated.
The Passive Saver
For some people, saving money sounds good, but, you know…whatareyagonnado? Taking an active hand in building savings just isn’t in their nature. If that’s you, don’t worry. You just need to find some inactive ways to save money.
The first and easiest way to save money without really trying is to funnel a portion of your paycheck directly into savings before you’ve even seen it. It you have direct deposit at work, you may have the option of splitting your deposits into multiple accounts. If so, slice 5 to 10 percent directly off your paycheck and send it into savings. Eventually you’ll learn to manage with the smaller paycheck and you’ll be saving money every month without even thinking about it.
If you don’t have direct deposit, consider setting up an automatic bill pay every month for your major bills, and then bill yourself. Think of your savings account as a creditor you owe and pay it a set amount every month.
These are just a few examples of how you can change how you save to match your personality type (rather than the other way around). There are a lot of personality types, though, so think about how you get satisfaction from money and look for a creative way to use those instincts to your money-saving advantage. Good luck!