Get social to boost your savings
Want to get on the fast-track to your financial goals? Partner with a money buddy or join a support group and you could find yourself saving more and getting closer to your goals. When you’re making a firm commitment to boosting your savings, getting help doesn’t have to mean cutting up your credit card or keeping away from shopping malls. With support and encouragement from your financial allies, you could find yourself meeting your savings target in no time. We spoke to Adele Martin, CFP® and Principal Financial Adviser at Firefly Wealth about getting the most out of being a social saver.
What are the benefits of having social support for your savings and financial goals?
Research has shown you’ve got a much better chance of success when you share your goals with someone else and report on your progress.1 Even writing your goals down can make it more likely you’ll achieve what you set out to do.2 As a planner, I’ve always encouraged clients to write down their goals and include a dollar amount and timeframe for each one because it can help to make it more real to them.
Sharing your goal with someone else and committing to report back to them on your progress can really motivate you to stick to your plan and goal. When you know you’ll be letting someone else down, it can give you that extra discipline and motivation. That’s one of the reasons I’ve set up The Savings Squad Facebook Group. Joining an online network can be a great way to be more accountable for your savings goals and stay in regular contact with people who can offer you real encouragement.
What should you look for in a money buddy?
People can find it much harder when they’re saving for something if they’re choosing a goal that isn’t actually important to them. Saving to buy your own house is a good example. If your personal values are security and family, then it might be the right goal for you. But if your values are around enjoying time with friends and having new experiences, then home ownership probably isn’t your top priority. So when you’re choosing a savings goal and a money buddy to support you in reaching it, make sure they’re both aligned with your values.
It’s also important to seek support from someone you can trust and who has enjoyed some success with savings themselves. After all you wouldn’t ask for advice on buying a home from someone who hasn’t been through it themselves. So it doesn’t make sense to choose a money buddy or mentor who is deep in debt or finding it hard to make ends meet.
You should also work with someone you can confide in and trust. When you have negative money habits you’re trying to break, it can be hard to talk about. But owning up to the problem is an important step towards solving it. So you need to be sure the person you’re confiding in can be discreet and keep it between the two of you.
Any advice or tips for getting the best from your financial support network – whether that’s a financial planner, Facebook group or money buddy?
Getting all your goals on paper can help you understand which ones are a priority. And if you haven’t been great at saving in the past, try to choose just one goal and save for that one to start with. Knowing how much progress you’ve made is a really good motivator so be sure to keep your buddy or group up to date on your successes and setbacks.
Comparing your spending with other people can also help you to set realistic targets. Swapping notes on your average grocery bill or what you’re spending on gifts lets you know if you’re being realistic and reasonable with your budget. That’s not to say everyone should be spending the same on their food bills. But if you know what’s seen as a reasonable amount, you can make a conscious decision to spend more or less on certain things, depending on what your own priorities are.
Whatever goals you’re saving for, a CERTIFIED FINANCIAL PLANNER®professional can offer valuable advice on managing your budget and making changes to get you in control of your finances.
“The positive effect of accountability was supported:those who sent weekly progress reports to their friend accomplished significantly more than those who had unwritten goals, wrote their goals, formulated action commitments or sent those action commitments to a friend. There was support for the role of public commitment: those who sent their commitments to a friend accomplished significantly more than those who wrote action commitments or did not write their goals.”
“The positive effect of written goals was supported: Those who wrote their goals accomplished significantly more than those who did not write their goals.”
Online source: Produced by The Financial Financial Planning Association of Australia and published on 04 July 2017. Original article.