In a time where many are feeling the impact of inflation and the rising cost for a variety of goods and services, some are also finding it difficult to make progress or even establish their savings goals. In fact, a recent survey‡ found that 49% of adults in the U.S. have less or no savings today compared to this time last year.
Savings goals are often directly tied to the stage of life you are in and evolve over time as goals are met, income changes and life circumstances change. For example, in your 20s and 30s, a savings account may be used to ensure you can handle an emergency expense, or to reach a goal such as paying for a wedding or the down payment on a first home. As you get older, savings can help you plan for the future. Having a plan in place to save money for not only a rainy day, but also those short- and long-term goals is the foundation of financial independence.
Making saving fun could be a great way to jumpstart your goals. This idea is called financial gamification – when you create a system of challenges or competitions for yourself in order to motivate and meet financial goals. It can turn the everyday tasks of personal finances that might not seem that fun into an enjoyable experience that also give you rewards.
To start with your “Savings Challenge”, get serious about the game. First, conduct a financial review so you have a good idea of your income and expenses. Next, create a challenging, but realistic savings goal that aligns with your income and expenses. The point is to set achievable milestones for yourself to get the ball rolling.
Then, give yourself a set time to hit certain goals, like saving $1,000 in the next three months. You could also challenge yourself to move $10 a week over from your checking to your savings account. However, you decide to challenge yourself, focusing on smaller goals first can be motivating in reaching and establishing larger ones.
Here are five other fun “Savings Challenges” to try:
1. The Friendly Competition
Encourage your friends to participate in their own savings challenge and see who can save the most. This game can be as structured with rules or flexible as you want it to be. Gather your friends, set a time frame and whoever has the most saved at the end of the month wins.
2. Set up an Automatic Transfer
This one is easy because it only requires upfront work with your bank and then you get to check in and reap the benefits of the game. If you have something specific you are saving money for, like a car or a down payment on a house, create a savings account with your financial partner that is specific to that goal. Then, set up an automatic draft to that account out of each of your deposits. It can be as little as $5 a deposit, but you’ll be surprised at how much easier it is to sock money away when it’s happening automatically.
3. No-Spend Weeks
Give yourself a challenge to not spend any money for a week. Keep track of each time that week that you considered or would have normally spent money and how much it would have been and at the end of the week, transfer that money into your savings account. This challenge can also bring focus to your spending habits and can help you make better financial decisions moving forward.
4. Round Up Challenge
When you do need to spend money, make each purchase work for you with a round up challenge. Try for a month to note the amount of money it would take to round up to the nearest dollar every time you make a purchase. When you look at such a small amount of money per purchase, it feels doable to put those extra cents somewhere else. But at the end of the month, you may be surprised at how those cents add up! There are apps available that can help with this game as well but be sure to talk to your bank or do your research first to ensure that any app you are using is safe, secure and to be aware of any fees you may have to pay for services.
5. Try New Savings Solutions
Once you master these games or start to hit your original goals, kick it up a notch by working with your financial partner to discuss any new savings solutions such as money market or time deposit accounts. These are specific savings accounts that can boost your goals even more and can be a fun way to contribute and watch your inputs grow.
Whether you play one or all of these games and whether you fully succeed in them or not, this is the kind of sport where you get a participation trophy proudly. Taking steps to add to your savings and give yourself a cushion is incredibly important to achieving financial independence and helping your future self. Be sure to connect with your bank in this process as well, so they can help you achieve all of your financial goals.
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