Asians are known to be good savers. In fact, we are known to be legendary savers. It is like an in-built characteristic for us to save. While many of us are good savers, we think that there are four small mindset changes that can help you up your savings game, i.e. save more money than what you are already saving.
Related: 52 Ways to Save Money in Singapore
1. Find out the WHY
“Why do you spend?”. That is a question that you need to answer in order to get you into the right mindset. Do you spend on clothes to impress someone? Or do you spend because you enjoy the process of making a purchase? Or does it make you happier to be able to don different clothes every day? The act of purchasing might be the same, but it can mean different things for different people.
By getting to the bottom of your motivation behind spending, you truly understand your own needs. Some of the needs can be fulfilled more cost effectively while some of them don’t even have to cost you money. So why waste money in fulfilling those needs when you can put them to better use?
Read also: The Right Way to Save with Your Credit Card
2. How many hours of my life does this cost?
Price is probably the first thing you look at when you are buying something. The price determines whether you will value it as an expensive or cheap item. Instead of thinking about things in price, here’s another way to think about it: Think about them in terms of the number of hours worked. For example, if you are paid S$8 an hour, a pair of S$300 Nike shoes will cost you 37.5 hours. That is equivalent to more than 4.5 days of work for you!
By shifting your mindset to think about purchases in terms of hours worked, it helps you curb unnecessary expenditure. You might even start to rethink whether your S$20 lunches are work it, considering that it costs you 2.5 working hours. By thinking of purchases in terms of hours, you will really think hard about whether it is really worthwhile to make the purchases. This is especially so if it is an impulse buy.
After all, time is your most valuable asset given that it is finite. Money is definitely not finite. By understanding how your purchases are linked to your working hours, it can create a life-changing effect.
3. Gamify your saving journey and make it fun to save
Saving might sound like a chore, but it doesn’t have to be boring. By gamifying your saving journey, you can make a game out of it and stay motivated. One way to gamify it is to try the 52-week money challenge.
Here’s how it works. You start by saving S$5 the first week. In the following week, you add another S$5 and save S$10 at the end of the week. For every week that follows, you add an additional S$5 and save that amount. (That is S$15 for week 3 and S$20 for week 4). By the end of one year, you would have saved S$6890!
You can also set milestones for yourself to reward yourself when you hit those milestones. For example, if you hit the savings goal for 13 consecutive weeks, you can withdraw 5% of your savings to buy something that you have been eyeing for. Or you can also choose to wait for the 26 consecutive weeks to enlarge your budget. But trust us, by the time you reached your 13th week, you would rather save than to spend.
4. Are you motivated by fear or reward?
There are two major types of motivation that encourage people to save: Fear or reward. A fear-based motivation means that you save to protect yourself from rainy days out of fear that something bad might happen to you. If you are motivated by fear, you might be thinking about questions like “Will I get sick in my 60s?” and “Will I have enough to retire?”. A reward-based motivation means that you save with a reward in mind like starting your own business or going on a dream trip. Your focus is on how money can get you closer to your reward.
Saving money is a marathon and not a sprint. By understanding your inherent motivation towards saving, you can use it as a motivation to keep your endurance in your savings journey. Every time you think about giving up, use your motivation as a reminder of why you are saving.