Reboot Your Financial Goals: From Holiday Splurges to Smart Savings

Consistently saving money, especially for something as important as a RESP, can be tough with life’s twists and turns. Things happens, and the holidays (or unexpected expenses) can disrupt even the best intentions. But don’t worry there are some tried-and-true strategies to help you stick to your saving goals. Here are a few tips rooted in psychology to keep you on track, no matter what.

Understand the Impact of Environment Changes

Habits are great… until your environment changes. The holidays, with their busy schedules and extra expenses, can easily throw you off your game.

Tip: Be aware that disruptions are normal and temporary. Acknowledge them and prepare to get back on track.

Example: If you overspend during the holidays, plan a specific date to review and reset your budget in January.

Use Visual Reminders

Visual cues can be powerful motivators. Just like writing the reason for taking a medication on the bottle can help motivate people to take it, visual reminders of your savings goals can keep you focused.

Tip: Keep a reminder of your main reasons for saving in a place where you can see it every day.

Example: Put a picture of your dream vacation spot or your child’s future college on your fridge.

Automate Your Savings

Make saving effortless by setting up automatic transfers. This way, you won’t have to think about it every month.

Tip: Set up an automatic transfer from your checking account to your RESP on payday.

Example: If you get paid on the 1st, set the transfer for the 2nd so the money is gone before you even see it. If not possible, set a calendar alert each month to remind you about your savings contribution.

Use Commitment Devices

Commitment devices help you stick to your goals by adding a bit of pressure. Knowing there’s a consequence can be a great motivator.

Tip: The pressure to keep true to your word and to not disappoint your social circle can help you stay on track.

Example: Share your savings goals and timelines with a friend or family member who will hold you accountable.

Cut Yourself Some Slack

Life isn’t perfect, and neither is anyone’s savings plan. Just like cheat days in diets or gym routines, it’s okay to miss a savings goal once in a while.

Tip: Allow yourself the flexibility to miss one or two monthly contributions without guilt. This can prevent burnout and keep you motivated in the long run.

Example: If you miss a savings goal due to unexpected expenses, plan to make it up over the next few months instead of stressing about it immediately. Celebrate small milestones, like reaching $500 saved, to stay motivated.

Embrace Fresh Starts

Psychologists have found that we’re more likely to start new habits after a “fresh start” moment, like the beginning of a new week, month, or year.

Tip: Use these natural fresh starts to recommit to your savings goals.

Example: After the holidays, use the New Year as a chance to reassess and reset your savings plan.

Conclusion

Saving money can be a challenge, especially when the holidays disrupt your routine. But with the right strategies, you can get back on track.

Understand that disruptions are normal, use visual reminders, automate your savings, leverage commitment devices, allow yourself some buffer, and embrace fresh starts to keep your savings habit strong. These tips, backed by psychological research, will help you navigate disruptions and stay committed to your financial goals.

Happy saving!