How to stay on track with your sav­ings goals

Weekend Argus (Saturday Edition) - - FINANCE PERSONAL -

ASURVEY con­ducted by the Univer­sity of Pennsylvania a few years ago asked re­spon­dents to rank their strengths in 24 dif­fer­ent skills. Self-control was at the bot­tom of the list.

This is bad news for all ac­tiv­i­ties that re­quire self-control to achieve a goal. In­vest­ing is one of them. We need to exercise self-control to spend less. We also need to exercise self-control to re­main in­vested when news head­lines test our re­solve.

Self-control, as de­scribed by United States jour­nal Psy­chol­ogy To­day, is the abil­ity to sub­due our im­pulses to achieve longert­erm goals. It is one of the core at­tributes that sep­a­rate us from an­i­mals. Rather than re­spond­ing im­me­di­ately to im­pulses, we have the abil­ity to plan, eval­u­ate al­ter­na­tive ac­tions, and avoid do­ing things we will re­gret later. Willpower al­lows us to direct our at­ten­tion ap­pro­pri­ately, and it un­der­lies achieve­ment of any kind.

When it comes to goals, willpower can be a fair-weather friend that dives out the win­dow with lit­tle en­cour­age­ment. Why does this hap­pen and what can we do about it? Much has been writ­ten on this sub­ject with ref­er­ence to var­i­ous habits we are try­ing to break or cre­ate.

Here are six rea­sons our willpower fails, with tips that may help you to get and stay on track with your sav­ings goals:

For willpower to be sus­tain­able, we need to cre­ate a bal­ance. We are prone to an all-ornoth­ing men­tal­ity, which is our down­fall.

When it comes to sav­ing, small re­wards can make you feel less re­sent­ful about sav­ing and may help you to com­mit to your longterm cause. For ex­am­ple, if you re­ceive a bonus, al­low your­self a lit­tle in­dul­gence, and you will feel less like you are pun­ish­ing your­self by sav­ing the rest.

When man­ag­ing our fi­nances, we tend to be­gin the month with good in­ten­tions, but, as the weeks go by, we fal­ter. A good way to counter this is to set up a debit or­der for your sav­ings that comes off at the be­gin­ning of the month, and then for­get about it, rather than telling your­self you will save what­ever you have left over at the end of the month.

The more men­tal stress we face, the less en­ergy we have to de­vote to self-control. We are more likely to splurge when we are feel­ing stressed, but, be warned, the high from re­tail ther­apy is of­ten fol­lowed by the low of re­al­ity. If you are a stressspender, avoid putting your­self in tempt­ing sit­u­a­tions.

A cue is some­thing that prompts an ac­tion. We tend to get into the habit of re­spond­ing to cer­tain cues in the same way, but this does not mean that our in­ter­pre­ta­tion of a cue is cor­rect. It is pos­si­ble to re­con­di­tion our­selves to in­ter­pret cues dif­fer­ently. For ex­am­ple, when we have money in our bank ac­count, in­stead of read­ing this as a cue to start spend­ing, we can re­con­di­tion our­selves to in­ter­pret this as a cue to save. We need to fo­cus on this new, better be­hav­iour.

In point four, we learnt that we can change the way we re­act to cues. Cues of­ten set off a chain of events, and these pat­terns are hard to

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