Need Financial Motivation? Try a ‘Phrase to Save’

Posted

how to reach your goalsBetsy and Warren Talbot sold everything to travel the world, and have been for five years. The following story is an excerpt from their book, Dream, Save, Do: An Action Plan for Dreamers,” where they explain one of the key strategies used to save for their trip around the globe.

With a $75,000 goal in mind and 25 months to reach it, we knew we had some pretty serious cuts to make in our spending. The more we thought about that number, the “numb”er we felt.

How do you wrap your head around a number that big when you’re thinking about your daily expenses? Is my $20 savings at the grocery store really going to impact a number that big? It doesn’t seem likely. And because of that disconnect it was hard to see how our daily activities impacted our long-term dream. It wasn’t until we made the connection about comparing what we wanted to do on a day in our dream life to what we were currently spending that it finally clicked.

RELATED: 4 Ways Willpower Affects Your Finances (and How to Increase It)

We were walking in our neighborhood when I spotted a gorgeous necklace in a shop window. I’m not much of a fine jewelry kinda gal, but I go weak in the knees at an original creation by an artist I can meet, someone who makes funky art you can wear. This gorgeous piece of personality and bold statement was $100, and I wanted it. As I pressed my face to the glass like a little kid at a toy store, Warren said the words that would lead our saving efforts from that day forward.

“Is that more important to you than a day on the road? Because it costs the same.”

BINGO!

How We Used Our Phrase to Save

What a brilliant concept in such a simple statement. By focusing our saving efforts on a small but easily visualized segment of our overall figure, I could easily admire that necklace from the street and leave it in the store for someone else.

We estimated our dream life would cost $100/day, and instead of saving the full amount – $75,000–we focused on $100 goals. We were finally able to see how our daily saving and spending connected with our overall goal. This concept became known as our Phrase to Save, and we used it every single day until we reached our goal.

“Hey, that’s 1.5 days on the road!” or “We just purchased ourselves a full afternoon on a trip around the world!”

RELATED: Money-Saving Travel Tips Debunked

Each payday we would celebrate our “days on the road” number going into savings instead of comparing how far away we were from the end goal. Imagining our ‘number of days on the road’ made the process more encouraging than it ever would have been just slogging our way to the final number.

Even now, well into our travels, we can’t help but think about how many days of travel we’re giving up to make any purchase outside our daily living expenses. Obviously we do sometimes, but we love it that this mantra still helps us stay on track and remember why we saved all this money in the first place.

Create Your Own Phrase to Save

Remember, the Phrase to Save isn’t there to keep you from spending money; it’s there to remind you why you chose to save in the first place and whether this option in front of you fits in with that dream.

  • ck

    This is exactly how I’ve been saving for a house and the appliances I will need for it…Do I want a $1500 Prada bag or do I want the dark wood floors of my dreams…

    • Warren Talbot

      Exactly right, CK. That $1,500 will go a long way towards a new floor which you can look at eat evening while enjoying a bottle of wine, never missing that bag even for a minute.

  • jennafry

    Love this! I compare current purchase temptations to future monetary needs as well, but I never really knew I was doing it. I almost bought a pair or $50 sandals yesterday but I talked myself out of it my comparing it as around a quarter of a plane ticket I want to buy soon to visit a friend!

    • Warren Talbot

      Nice work stepping beyond the sandals. You are that much closer today to creating some good memories with your friend that will be far more valuable. Congrats.

  • http://www.facebook.com/yzauri.acosta Yzauri Acosta de Ureña

    OMG!! This is a great tip to save. I already have mine :)

    • http://www.facebook.com/Engchik Christine Tarlecki

      what is it? :)

      • Yzauri Acosta de Ureña

        It’s very similar to the article cause me and my husband want to travel next year to the US to visit some family. So we ask ourselves if it’s really worth a day of our vacation. We are from the Dominican Republic.

  • http://www.facebook.com/Engchik Christine Tarlecki

    My Phrase to Save is: “Stop! You Don’t Need It!Will That Help You Buy Your Beach House?” Having coffee out everyday get me to owning my beach house? Buying stuff at the outlets? No!

    • Warren Talbot

      The tough love phrase, I love it. By focusing on your dream it is amazing how easy it is to bypass the short-term gains that appear every day. You are another day closer to that new beach house. Let us know if you need help breaking it in.

  • DanceDanie

    I use this in my goal to get out of debt. “This money could better go to my credit card bills, I don’t need this (insert item here).” Great idea!

    • Warren Talbot

      Great willpower. It is hard to stay motivated to get out of debt, but your strategy will pay off well in the long run. Each time you bypass a purchase and apply the money to your debt you are that much closer to your big “debt free” celebration.

  • http://twitter.com/HealthyGarcia Tasmanian Minimalist

    That’s really a very clever way of looking at things. I say something to myself like “is that worth ten minutes/one hour/ one day of my working life?” or when I want takeout I say, ‘ that $30 I spend on pizza could be $30 I am paying off my debt”. Then I immediately go and pay the food amount onto a debt or savings plan. Works so far. Great article.

    http://tasmanianminimalist.blogspot.com

    • Warren Talbot

      Thank you for the nice words. Glad you enjoyed the article. Putting money immediately towards you goal is a powerful way to ensure you will keep moving forward in your saving plan. It ensures the money flows into “The Vault”, which we talk about in Dream Save Do as well. The key is that once money goes into the savings account it cannot come back out for any reason. You are $30 closer to being debt free each time you put it ahead of pizza. Good job!

  • Lora

    Ugh! If only I had read this five minutes ago before I ordered in dinner. I guess there is always tomorrow…

    • Warren Talbot

      The key to any successful plan is a willingness to forgive the times your slip and wake up the next day committed as ever to your goal. Good luck.

  • Tania

    Love these types of little tips for one thing at time habit building! By the way, I go weak in the knees for handmade jewelry too. I get waayyy more excited about a hammered brass piece made in Brooklyn than I do over a diamond ring in Tiffany’s.

  • aokimoonchild

    (I will preface this by saying I have no debt except for my mortgage). Working with my financial counselor, we set up a Wish List of things/projects I want to plan for. When I create my annual spending plan I consider if I can fit in any of these projects/purchases after achieving my savings and investment goals. This year among other things I have a new bed in my annual plan, so when I consider a random unplanned purchase I compare it with having the new bed I am yearning for. The wish list item always wins! Another tactic I use is comparing the purchase to a potential investment – I’ve built a nice portfolio of investments and it’s very gratifying to see my money working for me. Having money to buy extra positions usually trumps consumables that provide fleeting satisfaction.

    • Warren Talbot

      Having savings targets is such a powerful motivator and gives you something you can visualize your money going towards. This is why the Phrase to Save is so useful. By seeing your new bed versus some impulse purchase you can make the decision to stay on target more easily. Keep up the great work.

  • Nessie

    I am a 19 year old college student living at home, saving to move into an apartment soon. I am also a waitress so most of my money is in cash. During the month of march I decided that every time I reached $100 in cash I would put it away. Any money I had over $100 was my spending money. So if I had $106 than $100 would be put away and the $6 had to last me until the next time I got cash. Same thing if I had $186, I would then have $86 of spending money. I was able to save up $600 during the month of March with this strategy. Now I have my best friend trying to see how much she can save for April!

    • Warren Talbot

      Nessie, this is an excellent way to save and ensure you are putting your new apartment as your first priority. By funding it first you are able to avoid any temptation to spend on less important items. Plus, it gives you an incentive each month as you get closer to your goal.

      Well done.

  • Frances B.

    I will definitely use this tactic when saving up money for next semester’s tuition.

    On a more technical note, I hate how if i want to print or save an article, it doesn’t let me save the article in its full entirety – only the page I’m viewing (page one or page 2). The same goes for printing. I don’t want to just print page 1 or 2 – I want to print the whole article.

    • Warren Talbot

      Good luck as you save for your tuition and stay on target with your Phrase to Save.