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One of the first things towards mastering your money is to understand your ‘why’. Why do you want to get better with your money? What do you want to put your savings towards? Maybe it’s to travel more or to have enough for a down payment on a house. Whatever it is, sometimes we can slip up on following our money why.
Having a money motivation. It’s so simple yet so complex. People often don’t scratch more than the surface when it comes to understanding their money motivation. Person: I need to save more money! …Oh…uh, I don’t know, cause saving more money will be better?
Knowing your money motivation is important. It’s arguably more important than even getting on a budget. Whereas getting on a budget would be step one to becoming more money savvy, knowing your money motivation/your money ‘why’ is step one’s prerequisite.
Your money motivation is the guiding light to keep you on track towards your goals, even when they are far off. You want to buy that new game console? How is your house downpayment fund feel about that? Those shiny shoes at the mall calling your name? How will your vacation fund feel about you giving more attention to shoes than it?
So…you get it. A money motivation, the underlying ‘why’ behind your financial self, is important to cultivate. The problem? Sometimes it can be really freaking hard to follow.
Lets use an example. Monica Gellar wants to save up for a house downpayment. Her time in New York City is coming to and end and she wants to move out of her unrealistically massive Greenwich Village apartment. A big audacious goal of saving up a big amount of money within three years is set. The goal? Use the money for a down payment on a house.
For the first few months, the habit of saving money is easy. She is diligent in putting money aside every month and the goal reminds in clear view. The house is going to be hers!
But then things start to slide. Saving fatigue sets in (yep, it’s a real thing) and the habit starts to slide. It’s innocent at first, just a few lattes at Central Perk with Monica. Soon, she starts buying things she doesn’t need. That pasta maker just had to be bought. It was on sale!
A few of her friends, Phoebe and Chandler, say their going on a weekend getaway somewhere upstate. Monica isn’t sure if she wants to go and knows the money is better reserved for her house fund. Temptation sets in, she wants to spend quality time with her friends, so she drops all her monthly savings towards the trip and decides to go.
Due to her spending more money in different areas of her life, she hasn’t contributed as much to her house fund anymore. The goal is even farther off now. The goal starts to feel pointless and way too far off so she slumps down, watches Netflix and spends an embarrassingly high amount on ice cream and pretzels for the night.
You don’t have to be like Monica. Remaining focused and committed on your money motivations can be challenging at times, but it’s so rewarding to stay on track. Achieving your money goals, even if they are far off, is one of the best feelings in the world. You feel like a superhero!
Below are a few ways to stay on track with your money motivations.
Automate savings (and utilize financial tech)
Set up automatic transfers to deposit money into your savings account every time you get paid. To take it a step further, open up a savings account at a different bank, preferably one at an online bank since they offer higher interest rates on savings accounts. Online banks like Ally Bank offer a 1% APY on savings accounts. This is a lot higher than what brick and mortar banks like Bank of America, Wells Fargo, Chase, Woodforest, CitiBank and others offer.
Have the money transferred over into the savings account and it’s out of sight and out of mind until you need it.
Don’t forget about financial tech apps like Digit, which rounds up your purchases and withdraws a few dollars at a time and puts them into your Digit savings account.
Name your accounts
Holy moly, this is so awesome to do! Saving money towards a goal feels a lot more real when you’re contributing to an account that says ‘house fund’ or ‘F**k off fund’ than when you’re contributing to ‘account: 0002233’.
I have different savings accounts set up at Ally Bank for my: emergency fund, personal development fund, and Australia fund (yep, I wanna go to Australia!).
Whiteboards and memes save the day
I promise this one is a solid tip, haha. Go to your nearest superstore and buy a big whiteboard. Stick it up somewhere in your apartment or house and write down your money motivation and different savings goals on it. It being a white board, you can erase and adjust your goals as need be. It’s great!
Now let’s talk about memes. I know what you’re thinking, how are memes going to help me stay on track financially?!? Well I’ll give a personal example. I used to watch the show Everybody Hates Chris. On the show, the dad of the family, Julius (played by Terry Crews), is characterized as being hilariously cheap and frugal. Chris spills milk on a table and Julius says how Chris wasted “70 cents worth of milk!”.
Since I loved the show a lot, I decided to put a picture of Julius on my apartment door, so that every time I leave, I’m reminded to not spend excessively. It’s ridiculous but it works!
How do you combat savings fatigue and maintain focus with your money motivations?
(also heads up, no stock photo in this post, I took this photo while visiting temples in Bagan, Myanmar!)