If you’re currently saving up for something big — a vacation, a home, a car, you name it — you’re not alone. A recent survey by online lender LendEDU found that the most popular financial resolution for 2018 was to follow a budget (29.5%). The second most popular resolution? To save for a major purchase. More than a quarter of respondents (25.2%) said they were saving for something big, such as a home down payment, a renovation or a car. Those are big financial goals that can take months or even years to achieve. Saving a few bucks is one thing, but it can be hard to maintain momentum when the finish line seems so far away. We’re here to tell you those goals are huge and totally achievable. You just need to know where to start and how to stay motivated. We’ve got some tricks, grounded in behavioural psychology, that will help you get to your goal.
1. Make a plan
You have a goal, that’s great! Whether it’s a car, a house or a round-the-world vacation, you’ve taken the first step. Just because you decided on your goal doesn’t mean it will happen, despite what Oprah says. What you need now is a plan. In order to make it actionable, make it SMART: specific, measurable, achievable, realistic and timely. Let’s say your goal is to save for a down payment. How much do you need? When do you need the money by? How much can you dedicate to your goal on a regular basis, whether that's weekly, monthly or even daily? Answering these questions will help you set out a concrete plan and definition so you’ll know when you are succeeding or failing.
Do this now If you have access to the Evree app, we can help you build a plan. If not, you can sign up to get access here. In the meantime, you can totally do this on paper. Grab a pen and give your goal a name, date and dollar amount. Once your plan is set, stick to the fridge or somewhere else you can miss.
2. Plan for obstacles, too
Plans get derailed when the path to success is littered with temptations and distractions. Like when your friend texts with a last-minute dinner invite or concert tickets. Instead of trusting you’ll make the right decision in the moment, decide ahead of time what actions you’ll take to make sure you achieve your goals. Psychologists call this implementation intentions. For example, if you’re struggling to find extra money at the end of the month, you might say, “When I get a paycheque, I will put $300 in my savings account for my goal.” NYU psychologist Peter Gollwitzer pioneered the research on implementation intentions and found that doing this helped people with various issues: tempting distractions, bad habits, and just in even getting started. When paired with strong goal intentions, it’s a recipe for success.
Do this now Figure out your own if-this-then-that implementation intention. It can be as simple as transferring a portion of your paycheque into a savings account when you get it.
3. Get chunky
By definition a marathon is just over 42 kilometres. Beginner runners do not expect to be able to run that distance in their first week. They set smaller targets and work up to it. In the same way, a major goal can seem really overwhelming and hard to achieve when you only look at the finish line. When you break it into chunks, however, things become more manageable—and enjoyable. It feels really good when you hit smaller targets. If you’re trying to save up several thousand dollars, think of breaking it down into monthly and yearly saving goals instead. It’s far easier to save $100 a week than $5,000 a year (even if it's really the same thing).
Do this now Split your goal into manageable chunks. Instead of aiming to save several thousand dollars in two years time, consider reframing your target as a smaller amount each month—or even each week. You’ll have even more opportunities to celebrate your success.
4. Treat yo’self
This links to the theme of celebration. All work and no play makes for a hard goal to reach. Research suggests that focusing on some immediate rewards can actually help you reach your larger long-term goals. A paper published in the Journal of Consumer Research described how immediate rewards can help increased persistence in long-term behaviour. In one of the studies, high school students were given a series of rewards (coloured pens, snacks and music) while working to complete questions on their class assignments. The students who received rewards fared better than those who did not.
Do this now Find a way to reward yourself while working on your goal. If your payday is when you contribute to your goal, make sure it’s also when you reward yourself with sushi and a movie. Don’t go nuts, but make it fun.
5. Set an alarm
Sometimes we just forget to do stuff. Fortunately our smartphones can give us a nudge in the form of reminders. It’s a sure-fire way to boost your savings if you find yourself frequently forgetting to fund your goal. A 2014 study conducted using three different banks as field experiments found that regular reminders really do help increase savings. The researchers found that the most effective ones remind people of their specific savings goals as well as any related financial incentives — such as the interest you’ll earn on your money. If that seems like a lot of effort, set up an automated transfer with your bank. That way it will happen whether you remember or not.
Do this now Set up a reminder or automated transfer to move money to your goal. Give your reminder a really great name (e.g.“My Really Great Vacation”). You’ll be prepared against any feelings of laziness or forgetfulness.
6. Give yourself some slack
Ever cheat on a diet with a cheeseburger and think, Oh well, may as well start again Monday...and then you proceed to wash it down with a milkshake and bacon poutine? Behavioural psychologists have a name for this: What-the-hell Effect. The name sums it ups. When you fall off the wagon on a plan sometimes all your self-control immediately disappears. It’s impossible to prevent this from ever happening — we’re human after all — but we can develop strategies to minimize the damage. For instance, packing a little wiggle room into your plan can mean the difference between a small stumble and blowing it entirely. Researchers at the Wharton School at the University of Pennsylvania have explored the concept of emergency reserves and “just-in-case” flexibilty. It turns out the most effective way to combat the What-the-hell Effect is to accept it will happen and bake a stumble day into your plan.
Do this now If you find yourself losing motivation or you’ve missed a payment or three, don’t give up. Get back on the wagon right away. This is one of those cases where it really is better late than never.