The Art and Joy of Saving

Do you take a deep breath before glancing cautiously at your monthly credit-card statements? Are you frequently caught by surprise at how those seemingly inconsequential charges on things you can barely even recall now add up so fast?

If so, a reframe may be in order. Many people view saving as a kind of penance that can take the fun and spontaneity out of life. But saving for the right reasons, such as reaching personal goals that are deeply meaningful to you, can actually be — wait for it — a joy! You become the CEO of your finances, with the authority to allocate those resources for the greatest return on investment.

There are plenty of smartphone apps that promise to help you manage your money better. They'll track spending and net worth, help put the brakes on splurges, and some will even help prepare grocery lists to curb overspending on eating out. Trouble is, as potentially useful as they are, they don't give insight into why we spend the way we do. That's because understanding our own personal psychology when it comes to money is the key to making saving more delight than drudgery.

Heartfelt Saving

One way to turn the tables on your saving mindset is to save with the heart, not the head. This may seem counterintuitive, but some research shows that when it comes to saving and the push-and-pull of head vs. heart, the heart wins out. When participants in a U.K. study about savings motivations were asked what they should save for, the most popular answers were retirement, supporting children, and buying/renovating a house. That's the head talking. When researchers compared actual saving behavior to what participants said, there was a mismatch. In reality, people saved more for goals they had a stronger emotional connection to, like helping an elderly relative or having children.

This means you may save better — and more — if you get more specific about your goals to make them more emotionally compelling. If it's a house renovation, for example, picture that new kitchen or garden and how you'll use it. Or visualize all the great activities you'll do when you're retired with sufficient funds. It's the details that may help you get more emotionally connected to your rational goals, and help you stay strong.

Look Ahead

We're often encouraged to "live in the moment," which is great advice for savouring present experiences but can fall short financially speaking. In other words, impulsiveness and saving are not friends. Some research has shown that one of the best ways to resist the spending temptation is to focus on long-term goals. Regardless of financial literacy, people who engage in “forward thinking" tend to handle money better.

Still, spending traps are everywhere. E-commerce, credit cards and smartphone apps make spending convenient and trackable, but trying cash sometimes can make you keenly aware of what you're spending. It's an old-school trick but can work like a charm in helping you see exactly where your money is going. Using the SMART system — Specific, Measurable, Achievable, Realistic, Time-Based — can help with goal-setting, as can our goal-setting tool.

Money Views

There's still another piece of the puzzle: our beliefs about money. This has nothing to do with our level of financial literacy, goal-setting or impulsiveness, but can have a profound impact on how we deal with the financial aspects of our lives. These so-called money scripts largely come from our families and can surface unconsciously in our adult lives to undermine our best-laid plans. Some common notions that can wreak havoc on our financial behavior revolve around money avoidance, worship and status. Avoiders tend to consider money a bad thing, while worshippers think money is the answer to all problems. If you're someone who jumps on all the latest and greatest gadgets, you might be in the status camp.

Once we determine and acknowledge our money scripts, we can create new and improved ones that serve us better. As a start, our "Six Steps to Investing" article may offer insight into your style.

When it comes to joyful saving, it really is mind over matter.