financial coach

How To Hack Your Savings Mindset

Managing your money, and savings can be hugely influenced by your emotions. You could be an emotional spender and saver and you may use spending as a “treat” – it’s a minefield of emotions and shame.

Money doesn’t have to feel shameful, and according to Brené Brown, three components make shame worse: Secrecy, Silence, and Judgement.

It’s possible to tackle and master all three with practical solutions, and in order to stand the best chance of success, but first you need to understand how you react and are triggered by money, debt and savings,

Developing your savings skills can last you a lifetime, could change your future financial plans and could make a massive difference to your life for the whole of your life!

Here are four things to think about:

  1. Think about when you spend and why; does it give you a temporary high or does it make you feel better when you feel down? Do you struggle with buyers remorse?
  2. How do you feel when you have savings, when you can see them?
  3.  How does your savings state affect your mental health? The reason we look at these behaviours is to understand how you feel about money and to increase your motivation for achieving better personal wealth; ultimately allowing you the freedom to manage and enjoy your money. So, what does that ‘freedom’ feel like?
  4. When you understand the behaviours aligned to your saving and spending and financial choices it frees you to make informed and intentional plans going forward.

Once we have worked out your behaviour around savings and money, we can work out a clear plan, set objectives, look at your priorities and get financially organised!

You may wish to consider a savings challenge and there are many to consider:

1. The £1 savings challenge

Put aside £1 every day for a whole year – that’s a saving of £365 in 365 days.

2. The 1p savings challenge

Increase the amount you save every day by 1p. Start by putting away 1p, then 2p and so on. Keep it up and in 1 year, you’ll have saved £667.95. Proof that starting small can lead to big things and significant savings.

3. The 12-month challenge

Take each month as a number and multiply by 10 to work out how much to save. For example, January (month 1) will be £10, February (month 2) will be £20 and March (month 3) will be £30. After 12 months, you’ll have saved £780.

4. Save £2,022 in 2022

If you can afford to, you could try saving £168.50 every month (or £38.89 a week). After 12 months, you could have £2,022 to put towards a home deposit or an emergency fund.

5. Financial and physical health challenge

Link your health to your savings and save £1 for every pound you lose. You could do this for every mile ran, every length swam – the options are endless – but keep it fun.

6. No-spend challenge

This challenge involves not spending money on anything but the bare necessities, such as food and bills, for a whole month. You could also do a no-spend challenge for a week or fortnight at any time of the year to give your savings a boost.

7. Little vices saving challenge

This challenge relies on giving up ‘little vices’ – things you can live without. This could include a daily coffee, a shoe addiction or ordering a takeaway every week. You can either cut out all vices for an entire month or cut out certain vices for an even longer period. Not only will it help you become more mindful of your spending, you’ll save money too.

8. 30 wear clothing challenge

The 30 wear challenge is a commitment to wear a new item of clothing at least 30 times. It encourages you to pause and think about how you’ll use something before buying it. This is another way to practise mindful shopping. It can also reduce waste to help the environment and save you money in the process.

9. Shop and swap challenge

From your energy supplier to your supermarket – you can save by shopping around to find the best value for money. Go through all your regular payments and direct debits and look to review them all. Cancel subscription – do you need Netflix, Prime and Sky? Could you share a subscription with a friend?

Financial Coach: Favourite Challenge

These are all great and fun and quirky, but my favourite is the £1,000 challenge as it’s a sizable number and the achievement is impactful. Think of it like a Cash in the Attic challenge. What have you got that you no longer love, use or enjoy and sell it. I always use this with clients.

A recent client now regularly goes through her wardrobe and uses ebay to sell what she no longer loves. She uses Mozo and even has a savings pot called Ebay and has uploaded the logo as the image for the savings pot and uses it to fund weekends away or dinner out. She gets a huge amount of satisfaction from the fact that she’s paid for a treat by clearing out!

There’s nothing to say you can’t have a number of savings challenges going on at the same time.

Finally remember the process of saving isn’t exciting and it’s not sexy, so find a way of anchoring the act of savings to something you enjoy. Rewarding and celebrating the little achievements and savings goals.

It’s a process and you have to trust in the process, be patient and give it enough time. It’s always about building good financial habits that can last a lifetime.

Why not make 2022 the year of making positive changes to help you save money.

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