Saving money consistently is a difficult habit to master. It is like working out or going on a diet. Fortunately there are ways to boost your self-control and resist or remove the temptation to spend.
It’s natural for people to be irrational about money – it’s why everyone’s so eager to find clever ways of budgeting. But all the tips and tricks in the world won’t work if you don’t have self-control. Without it, you’re bound to make bad decisions.
One of the best ways to increase your self-control is to start emotionally connecting yourself to the future.
You probably know that your future self would be better off if you didn’t sit in front of the TV tonight and eat a pint of ice cream. But that future person usually seems so remote and far away that you give in to temptation anyway.
To help resist that temptation, try creating an emotional connection by imagining a conversation or writing a letter to your future self. You can also picture “future-you” appreciating the benefits of your good decision – kicking back and enjoying retirement in comfort thanks to the early investments you’re making today.
It also helps to think in terms of fixed dates. We’re more likely to be diligent about putting aside money if we set an exact retirement date. So rather than telling yourself, “this will come in handy in 30 years,” think, “August 23, 2030.”
Another way to boost your self-control is to set up Ulysses contracts. As legend has it, in order to get past the Sirens and their alluring-but-deadly songs, famed Greek hero Ulysses had his crew tie him to the mast of his ship. A Ulysses contract is a way to remove temptation by setting up a process or structure whereby a bad decision isn’t even an option.
If you’re lousy with credit cards, a good Ulysses contract would be to only use prepaid debit cards. Or, if you’re spending money that should be going toward your savings, reduce the temptation by setting up an automatic deposit that takes a certain amount directly from each paycheck.
In 2010, a study published in World Development showed that people who set up automated savings ended up saving 81 percent more in just twelve months!
Now that you have a better understanding of why we’re so bad with money, it’s time to stop making excuses and start being more sensible.
***Paraphrased from Dollars and Sense by Dan Ariely and Jeff Kreisler***