We know that ticking those new year’s resolutions you made last January (such as eating healthier, living a more active lifestyle, or building up your savings) hasn’t been (and still isn’t) exactly easy. The idea of cutting back on your normal spending is daunting enough, but actually following through is the most challenging part.
But hey, don’t let that discourage you. Saving money is a wonderfully practical resolution any time of the year. When you’re more financially stable, money becomes one less thing to worry about.
To help you see through your quest, we’ve listed four actionable tips backed by science.
One Saving Goal at A Time
According to social psychologist Roy Baumeister, keeping resolutions require a lot of willpower and self-control. “Decision making depletes your willpower. Once your willpower is depleted, you’re less able to make decisions.” Having multiple resolutions make it more unlikely for you to follow through on any of them.
Focus on the most important thing you want to achieve, and go all out to make it happen. Once done, divert your efforts to another goal and so on.
Use Rewards and Roadblocks
Continuing Baumeister’s idea, following through on a resolution (such as saving money) exhausts willpower. Luckily, measures can be taken to reinforce willpower.
A Harvard University research conducted by Ron Siegel may just have the answer to that. Sigel suggests that the key to following through is connected to how pleasurable and optimistic the experience is. If the experience is positive, then you’re more likely to go through it until the end.
How do you do that? Here are some pointers:
Change your perspective. You can make saving fun by getting rid of the begrudging mindset towards setting aside money. Have a more positive outlook on the matter.
If you’re saving up so that you can afford to get a condominium unit on your own, imagine the perks you’ll soon be enjoying when you have your own place.
For one, you’ll have the condo amenities such as the gym and swimming pool at your disposal. Cutting a few luxuries such as your regular mani-pedi in the meantime will be well worth it in the long run.
Reward Yourself. Make the experience more positive by rewarding yourself after achieving that goal. Say, you’ve saved up enough for the down payment. You can then treat yourself with that mani-pedi you’ve been postponing for a while.
Set Roadblocks. Aside from rewarding yourself and making saving an optimistic experience, you can rewire your brain further by making spending difficult.
Place roadblocks everywhere you would unnecessarily spend money on. A roadblock short-circuits impulse buys by stopping you right on your tracks.
Here’s an idea. Wrap your credit card in a piece of paper and write something that’ll make you stop. Why not stick a photo of Terry Crews looking at you disapprovingly? Every time you are tempted to take out your card, you must bother unwrapping it while enduring Crews’ judging gaze. This roadblock not only gets in the way of your spending but also gets you to pause and reconsider.
Observe a Financial Timeline
A research by neuroscientist Moran Cerf affirmed that decision-making can be exhausting and evokes negative feelings. The most optimal way to maximize happiness is to make smarter high-level decisions that eliminate the need for smaller decisions.
Setting a standard timeline for spending money is the way to do this. By budgeting ahead and giving yourself a weekly or monthly allowance, you lessen impulse buys.
Tip: Set aside money for your bills first, then figure out what your other necessities are. The remainder can go straight to your savings account (or at least part of it).
Don’t Underestimate Rare Expenses
How many times have you let yourself go with an excuse that it’s a “special occasion?” What we don’t realize is that “special occasions” happen more frequently than we think.
A friend’s birthday is coming up, and there’s going be a glitzy party. You think that you’ll need to buy an expensive new dress and cringe at the thought of the expense. However, you’ll comfort yourself by saying that a party like this doesn’t happen often.
Of course, a few months after, another friend is getting married. Another special occasion presents itself, along with an opportunity to splurge.
A consumer research by Abigail B. Sussman and Adam L. Alter revealed that people typically fail to account for exceptional expenses for “special occasions” into their budgets and end up overspending and under-saving.
Here’s a tip, don’t underestimate exceptional expenses. Set aside a portion of your monthly budget for possible situations that you can’t get out of spending for.