I’ve never been called the life of the party, but I like to think I’m a pretty fun person to hang out with. However, when my duties as part of USAA’s Military Advocacy team have me on the road extolling the virtues of saving and investing, there are times when I feel like the no-fun guy.
Sure, from a financial planner’s perspective, “cut here,” “cut there,” “quit this,” “quit that” and “save, save, save” are all viable ways to free up money to take care of your financial business and afford the things you want in life. But as sound as those messages may be, they conjure up images of sacrifice and austerity (do I have to give up that quick stop for a breakfast taco?). Not wanting to be thought of as a downer, I realized I need to change my message. And I had to look no further than the way we do things at our house to tweak my messaging: “Save for fun.” Bam. Who doesn’t like fun?
Here are four ways you can build some fun into your savings plan:
Earmark your efforts. If you look at your savings account and feel excited, you’re probably the exception. Many of us just sigh and lament the lack of digits in our balance. But what if you opened your mobile app or went online and nicknamed that savings account “2019 Hawaii Vacation”? You just might feel a little excitement as you watch the funds accumulate. At our house, we have an emergency fund (no fun), vacation fund (name changes each year), a house fund (there’s always something) and the Vegas fund (a lost cause, but fun). Each paycheck, we automatically add money to the various accounts, and when I review my accounts I see more than numbers.
Visualize the end state. The phrase “patience is a virtue” is key to financial security but flies in the face of society’s growing need for instant gratification. By its very nature, saving or investing is the antithesis of today’s “culture of now.” One way to win the battle against immediate satisfaction is to spend time, effort and emotional energy creating your vision of the pot at the end of the rainbow. The concept of retirement may sound boring. On the other hand, traveling the world to play the top golf courses on each continent is not. Create your vision, keep it front and center, and you’ll have a savings purpose that’s fun to think about and eases the pain of forgoing something today.
Celebrate your savings successes. Celebrating is fun, and doing it in a responsible way will help you stay on track to achieve your longer-term goals. It could mean a casual dinner out after you’ve met your quarterly debt-elimination goal, or a weekend getaway in lieu of a big vacation this year to pave the way for savings that will fund your dream vacation next year. It’s always fun to get a pat on the back, so give yourself one for the good work you’re doing. My wife and I are forgoing a big summer trip so we can ramp up for a 2019 European blowout. When it gets hot again we’ll assess our progress toward that goal, congratulate ourselves (or course-correct) and push forward to 2019.
Save that which creates no pain. Unfortunately, cutting back is often the only lever we have to increase savings. However, a pay raise, promotion, bonus or windfall all offer opportunities to save or invest money that doesn’t require sacrifice. You get the upside of increased savings without the downside of having to feel the pain of cutting out part of your spending. That’s fun.
I’m a bit skeptical that this new approach will elevate me to life-of-the-party status; however, putting a little fun into your finances could be just what you need to boost your savings game to the next level and power you toward the places you want to go and the things you want to do.
J.J. Montanaro is a certified financial planner with USAA, The American Legion’s preferred provider of financial services. Submit questions for him online.