Some people love setting goals. Others of us save because we know we should – without having specific goals in mind.
Yet being deliberate about why we’re saving and applying some psychological techniques can increase our savings significantly.
A recent study in the US found that participants who linked their emotions to the act of saving increased their savings by 73%.1
Here’s how you can apply the same techniques to help you save more.
Identify what matters
The first step to setting meaningful goals is to picture your life in 1, 5 or 10 years from now. What would you like to be doing? Where do you see yourself living? How would that feel?
From there, write down the short-, medium- and long-term financial goals that will help you create this life. It could be to save enough for a deposit for a home. If you’re thinking long term, it could be adding to your pension so you can secure a stable retirement.
Whatever you choose, make sure you’re passionate about achieving these goals. They need to be things that excite and motivate you.
Name and date your goals
When you’ve got some goals in mind, it helps to get specific.
Maybe you’ll refer to one as your ‘Getting the keys’ project. Or your ‘Financial freedom’ fund. Doesn’t that make them feel more real? More personal?
Once you’ve got a name for your goals, be sure to add a date or milestone too. It might be, ‘Getting the Keys in 2025’, or ‘Financial Freedom at 55’.
This gives you a firm target to aim for. And from here you can work out how much you need to save each month to get there.
Create visual reminders
If you’re serious about achieving your goals, it can help to create visual reminders. Quotes, drawings or framed images are all great ways to bring your goals to life.
Display these reminders somewhere prominent – maybe in the kitchen, bathroom or by the front door. That way you’ll always be reminded of what’s important to you and why you’re saving.
Make it automatic
Now you’ve got a clear vision of what you want, lock in that enthusiasm by automating the act of saving.
Set up standing orders from your current account to your savings and/or investment accounts, using your goal name as a reference. Ideally, set the payments to leave your account on payday so you’re prioritising paying yourself first.
When you tap into the emotion behind your goals, you might find yourself spending less. If so, you can top up your savings with whatever’s left at the end of the month.
There are savings accounts that will transfer the amount you select on payday via standing order for you. Use our calculator to see how much you could save over 12 months with a Regular Savings Account.