What’s funny about money is that most of us know what we should be doing to prepare for the future. And even if we didn’t, answers are one search away. So why is it that most of us are so terribly unprepared for retirement? If you found yourself reading this post, chances are you’re wondering why you’re struggling to stay motivated to save money. It’s okay. We all have our peaks and valleys. But let me share just a few thoughts on setting ourselves up for success when it comes to staying motivated to save money.
1. Find a Compelling “Why”
I know what you’re thinking, “Oh boy here we go. Didn’t know I was reading the opening chapter of every self help book ever written.” Fair, but all B.S. aside, when we remove all the noise and strip it down to the basics, at the fundamental core of everything we do there is a “Why”. Sometimes that why is “Just because we want to.” But other times, especially when we are trying to encourage a habit of delayed gratification, we aren’t going to “feel like it” so we had better have a strong case for delaying our gratification.
This is why having a “why” is so critical when it comes to staying motivated to save money. Because not going out to eat, and not buying the picture frame tv, and not going to that weekend vegas trip really sucks. So if we don’t have a reason we are delaying our gratification then it’s only a matter of time before we fail.
Here are 3 decent examples of “Why’s” that might keep us motivated in this particular pursuit.
We don’t want money to control us.
There’s no better feeling than being able to say no to money. If we are a slave to money (by not being able to manage and accrue it properly), we will always have to say yes when we get a job offer for more money. Even if the lifestyle or enjoyment of the work is worse. Being in control of money give us control of our lives. And we all want control. We either make money our slave, our become it’s slave.
We don’t want to work our entire lives.
Most of us go through our 20’s and 30’s thinking, “Oh well I’ll start saving when I’m making more money. Right now, money is just too tight and when I’m older I’ll be making more and start saving then.”
By experience, I’ve realized that no amount of money is enough to start giving and saving. I started my career making $52,000 a year and was living in my friends house for $100 a month. During that year, I didn’t save or give a single dime. I spent everything.
We desire to have “f*** you” money.
You know that 50 year old who rolls up in the G-Wagen and gets out to go enjoy his cup of coffee on a Monday morning at 9:30AM? He’s got f*** you money. Or how about the woman who goes to yoga twice a day with a fun bunch with the girl friends in between? Yeah, that’s f*** you money too. (Or a husband who is in the office 60 hours a week.)
There is no one-size-fits-all, but 9 times out of 10, the kind of person who has f*** you money has sacrificed early in their lives and bought assets which now give them the ability to live off dividends and growth of their army of financial slaves. Sure, we can have all the income in the world from our job, but don’t think we’re gonna be going to coffee during the workday or hitting the yoga studio either. F*** you money is about being able to get whatever we want but most importantly also about being able to actually enjoy those things. Not dream about them from our cubicle.
2. Remove The Possibility of Failure
Having a “why” is great and critical to getting started, but no matter how strong our “why” is, we will go through troughs where we “Don’t feel like saving money anymore…”
We are human. And to be human is to suck sometimes. So let’s pull the bumpers up on our bowling lane and rack up some points. Removing the possibility of failure to stay motivated to save money means doing a couple things.
Make our savings go straight from our paycheck into our investment or savings account. Pretend like the money doesn’t exist. We work hard for our paychecks so why not pay ourselves with the funds? If that last sentence doesn’t resonate, read my article on my favorite 5 Wealth Lessons from The Richest Man in Babylon. Personally, I have auto-draft set up to pull weekly from my checking account to my vanguard mutual fund investment accounts. I don’t have to think about it. It just happens. Whether the market is up or down, I’m buying. This is the concept called dollar cost averaging which I talk about in my post on index funds. Dollar cost averaging keeps our human nature from completely destroying our hopes of building real wealth in the markets.
Make It Hard To Access
Saving our money in a savings account can be great in many ways, but it also has some downsides. First, it’s easily accessible. So when our girlfriend gets a new BMW and we are dying to keep up, why not dip into the savings? Just this once! For this reason, it can be good to put it into a real retirement fund that doesn’t allow us to withdraw without significant penalties. We are much less likely to sell our investment, pay the capital gains tax, pay the early withdrawal penalty, wait 4 days for the funds to settle, wait 2 days for the funds to get back into our checking account, all to buy that UPPAbaby stroller.
Don’t Bite Off More Than You Can Chew
We might be able to work 3 jobs and go to school for a little while, but we won’t be able to do it forever. That’s obvious. So consider that too aggressive of a savings plan might have the same adverse outcome of inability to sustain long term. Removing the possibility of failure means being smart and systematic about setting up our goals and savings rates. If our eating out budget is $50 a month, then we probably aren’t going to like this whole “saving money” thing for very long.
This is the same beef that I have with the fitness industry telling all of us that in order to be in shape we have to exercise for at least an hour a day, 5 days a week. Sure, that cadence might get us in shape pretty dang fast, but if only 30% of the population can adhere to that program, then can we actually claim that to be an effective program?
3. Track and Celebrate Success
Personally, I probably do this to a point of negative utility. But the truth is that scoreboards exist because people care about winning and losing and despite what they’re teaching elementary school kids on the soccer fields, there is ALWAYS a winner and loser. Winners put in the work. They study the game. Winners asses their own strengths and weakness in order to determine how they might best increase their odds of success. They are patient and know that success doesn’t come overnight. Winners surround themselves by positive, uplifting people who encourage them during the hard times.
By tracking our savings and investments, we gain knowledge of our current situation. And this knowledge becomes power and confidence. And over time, it becomes mastery. Anyone can learn the laws of money, and trust me there truly are laws of money. I go over some of these in my post on The Richest Man in Babylon.
If we track our money, it becomes real to us. It becomes something that we watch grow over time. It gives us hope that maybe we won’t be banging the keyboard for hours 5 days a week for the rest of our lives. Maybe we won’t be renting this crappy apartment forever. Tracking our money gives us power. Power to persist and stay motivated to save money.
How do we stay motivated to save money?
We do this by deciding why we care enough to make the huge sacrifice. And it does feel huge until our lifestyles adjust. We also do this by removing as much possibility of failure as possible. A couple examples of this is automating our saving and making the savings hard to access. And finally, we stay motivated to save money by tracking and celebrating our small successes along the way. Whatever our goals, whether they be comfortable retirement or financial independence, success won’t happen over night. This is a lifelong decision to focus on the essentials at the exclusion of all else.
Anyone can stay motivated to save money. I hope these 3 tips are helpful. Comment below if you have some other ideas because heck, I could always use more ideas on staying motivated.