The reality is, people only save for things they actually care about. Do you have any goals that you have set your mind on for a while? Perhaps it is the family trip you have been meaning to go on or setting up the business that you have been dreaming about or even owning your first home. While we are at it, it would be great for you to find a piece of paper, list down all of these goals and store the piece of paper somewhere you can easily find again later (your wallet will be a good idea).
In this article we share some tips on how you can save for those goals and be disciplined until you achieve what you have written down earlier. You can repeat them every week/month depending on when you get your income:
1) Set a separate container for each goal
If you have 3 goals, you should have 3 containers with an exact amount specified for each one. For example:
- Staycation in Malacca with the family (RM500)
- Emergency fund (RM5,000)
- Down payment for your first home (RM30,000)
As you can see, the travel goal is a very short-term goal (achievable within 3 and 6 months), the second one is a medium-term goal (achievable within 1 and 2 years) and the last one would take more than 2 years for most people.
Depending on the amount specified for each of the goals, you would also want to consider the type of ‘container’ you will be using to save your money. Clearly, you can do it with a regular coin box if you are only saving up to a few hundred ringgit. Anything beyond is best kept saved at the bank for safety reasons.
You can opt to open a new bank account with your current bank, or with another bank of your choice. Some find that saving bigger amounts that should not be touched, like your retirement fund, in places such as an Amanah Saham Bumiputera (ASB) account works well because it’s a bit more tedious to withdraw from and can earn much higher returns than a savings account.
Split your monthly savings allocation into long-term and short-term goals
Let’s say you are allocating RM300 for savings this month from your total earnings, then you should split the RM300 into all 3 goals accordingly with priorities on the short- and long-term goals. In this case, maybe have RM60 allocated into your Malacca trip, RM120 into your emergency fund and another RM120 for your new home down payment.
You can adjust the ratio depending on the number of goals you have and depending on how urgent your short-term goals are. Maybe some months you want to put more into your short-term goal because there is a deadline that you need to catch (e.g. your goal is to buy your mum/spouse a nice birthday gift). Feel free to allocate more into that goal for that particular month. But the moment that goal is achieved, you should adjust back to the original ratio.
💡 Pro Tip: if you can’t be disciplined enough to set the amount consistently for your long-term goals after receiving your paycheck, perhaps you can set up a monthly auto debit that can help you transfer money from your current bank account into your long-term investment / ASB account, as well as your EPF account.
2) Reward yourself, you deserve it!
Do you remember as a kid your parents will tell you if you behaved well, they would give you some candies or some money (for you to go buy candies) as rewards for your good behaviour?
We are more likely to sustain good behaviour or habits if we know there is a reward for doing so. With that in mind, we can motivate ourselves easily to keep the habit of saving by providing rewards upon achieving certain milestones. For example, if your goal is to save RM5,000 for an emergency fund, you may find it quite difficult to sustain the momentum over a long period of time. So, you should celebrate the small milestones, such as for every RM1,000 saved, treat yourself to a cup of bubble tea or a movie night with friends.
This self-reward mechanism can give you the boost you need to get to the next milestone, and it will fuel you with the feel good factor to keep on saving. You can also try this self-reward for other good habits you wish to adopt be it reducing time wasted on social media, waking up earlier in the morning or staying consistent with your workout routine.
3) Look at your goals and visualise
It can be quite challenging to maintain the motivation to achieve the goals you have set. But don’t worry, since your goals are just within your pocket (if you had chosen to keep them in your wallet). So, whenever saving starts to look like a chore, pull the list out and go through them.
Depending on where you are (not while you are driving or operating heavy machinery), close your eyes and imagine what life would look like after you have achieved your goals. Think about the smile on the faces of your loved ones, enjoying the trip or the beautiful gifts you bought them. Or the incredible life you have after retirement where you can buy things without looking at the price tag. All because you made smarter choices today.
Visualising will also help you to avoid getting distracted from achieving your goals. This can help attune your brain to eliminate the temptation to spend your savings on impulse purchases such as the new gadget you don’t need urgently or the 50th scarf you absolutely don’t need or another premium digital service that you can live without.
Visualising your goals is free but the rush of motivation you get after that is incredible. Try it!
4) Birds of the same feather flock together
Your social circle influences your money behaviour in a large way. If you sit with the people who spend, you’ll spend and if you sit with the people who save, you’ll save. We are not suggesting you change your friends. If you have the willpower to resist the urge to spend while you hang out with them, then good for you. But if you can’t, then be more selective about spending time with friends who are less concerned about how they spend their money.
If you are serious about fixing your money habits and saving more, find a support network that is also aligned to those goals. Perhaps they can “peer pressure” you into taking up good habits such as sticking to your saving goals and cutting back on unnecessary spending.
Again, people save for things they truly care about. So now it is time to ask yourself what are the things you truly care about and to start making progress in that direction. It can be quite challenging to stay steadfast in achieving your goals but with the right support group and a system in place, those sacrifices you make will be worth it.
Today, you can find financially savvy tribes quite easily. You can subscribe to digital content (like this one 👍) or blogs that teach you about money management. You can also follow certain social media pages to get access to likeminded communities such as Ringgit Oh Ringgit or Multiply.org to surround yourself with fellow savers.