Back in April we shared the story of Betsy and Warren Talbot, who realized their dream of spending five years traveling around the globe. The money strategy that made it all possible? Their "phrase to save," a financial motivation tool that helped them sock away $75,000.
Here's how it worked: While trying to set aside money for their adventure, Betsy and Warren learned to postpone would-be purchases by comparing their prices to one day on the road, or about $100. Suddenly, a $100 statement necklace no longer seemed like a must-have splurge, if it meant shortening their trip or giving up a day of travel.
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How a Phrase to Save Can Help You
A phrase to save is a tried-and-true way to align your day-to-day spending with your longer-term dreams. After all, it's no fun to forgo your morning coffee, unless you consider that the $15 you save every week by drinking it at home instead of buying it each morning would add up to one-fifth the purchase price of that fall coat you really want. Or the price of one stock in your as-yet imaginary portfolio. In fact, research even backs this up: A University of Pennsylvania study found that those who focus on visualizing their future goal make better financial decisions today.
And it turns out, the Talbots weren't the only ones relying on this trick. The story resonated with many readers, and we loved hearing how other LearnVesters use their phrase to work towards their goals, like the reader who asks herself: "Do I really want a $1,500 Prada bag ... or those hardwood floors of my dreams?" Or the commenter who nixes unplanned expenses when she visualizes the cozy new bed she's planning to purchase.
Real Readers Reveal Their Phrases
Here, how four readers are reaching their financial goals—by keeping their phrase to save in mind each day.
“Will This Help Me Buy My Dream Beach House?”
Name: Christine Tarlecki
Location: Phoenixville, PA
Profession: Freelance writer/marketing professional
Goal: $100,000 toward a down payment on a three-bedroom beach house in Avalon, N.J.
How My Phrase Does the Trick: I’ve been using my phrase A LOT these past few months—I have to! I often get tempted to splurge on dinners out and occasional shopping.
"Sure, I've slipped a few times, but, with this phrase to save in mind, I’m already almost a third of the way to my $100,000 goal."
For example, most recently, I was really pining for a new Rebecca Minkoff tote bag. So, to keep my spending in check, I asked myself: “Will this help you get your beach house?” The answer, like always: “No!”
Other questions I've asked myself: “Will having coffee out every day get me to owning my beach house? Buying stuff at the outlets?” No, and no! I realized I didn't need the bag, and just remembered to use what I already own instead.
This summer I spent some time in the area of the Jersey Shore where I’m looking to purchase my beach house, and seeing my goal up close motivated me even more to keep working hard.
Sure, I've slipped a few times, but, with this phrase to save in mind, I’m already almost a third of the way to my $100,000 goal.
“That $30 Spent on Pizza Could Be $30 Toward My Debt”
Name: Francesca Massey
Goal: Paying off all my debt—and then start socking away enough to build up a fund for my 12-year-old daughter’s education.
How My Phrase Does the Trick: I’ve paid off over $30,000 in credit card debt in the past—but stupidly ran up the amount again. To get back on track—and make real progress on my savings—I’ve found that a "phrase to save" really works for me. For example, when I want takeout I say, "That $30 of pizza could be $30 I am putting toward being free of debt." Then I immediately pay that same food amount toward my debt, or stash it into a savings plan instead.
I use this trick all the time. And at first, I was really on a roll. I loved being sanctimonious about not wasting my money and saving it instead of buying things.
Then, of course, complacency set in and I had to give myself a stern talking to. So, to boost my savings even more, I put my spending in perspective of my hourly work rate. I mean, am I really prepared to pay my hourly work rate on a quick lunch or two? Not in my wildest dreams. Not anymore. Even that $4 coffee is the equivalent of about 6 minutes work. Better to make my own coffee and redistribute what I would have spent into my goals.
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“This Pair of Sandals Is a Quarter of a Plane Ticket.”
Name: Jenna Frye
Profession: Public relations account executive
Goal: $750 to fund a guilt-free vacation in February.
How My Phrase Does the Trick: Over the spring I was seriously tempted by a $50 pair of cute sandals. And I probably would have purchased them—had I not had an upcoming trip in the works and a phrase to save in mind.
I wanted to visit a friend, and so I began to justify all my costs in terms of the cost of that plane ticket. With that mindset, I ended up passing on a lot of other purchases—things like happy hours, a mani-pedi, and a concert from a band I don't absolutely love. They were all things that don't really matter in the long run—so thinking about my future spending helps me decide against them.
My next "big" savings goal is a trip in February, and now I’m using my phrase to save toward that vacation. I'm running the Disney Princess Half Marathon at Disney World, and I want to feel pretty guilt-free while I'm there—not that I’m going to spend completely frivolously, but I’d like to enjoy myself and eat a few good meals out. Since July I've been putting a bit of money away each month.
As such, I use my phrase pretty often. This trick is what has allowed me to take all kinds of mini trips!
RELATED: How I Do Paris on the Cheap
“Is This More Important to Me Than a Day in New York?”
Name: Yzauri Acosta
Location: Dominican Republic
Goal: $4,000 for two weeks in New York, including plane tickets, my husband's visa, food, transportation and shopping.
How My Phrase Does the Trick: My husband and I are saving up to visit family in the United States next year. But recently, I calculated that one day in New York would cost us around $260—and soon realized that if I kept splurging on unnecessary items, my husband and I would never reach our goal.
So, after reading the LearnVest article, I created my own phrase to save—putting all purchases in perspective of one day in New York. With my trip in mind, I’ve learned to stop myself from buying things I don't really need—like more shoes or handbags (my big weakness). This phrase has not only stopped us from buying stuff in order to reach our dream, but it also has helped us identify what our real needs are—and thus reduce our expenses.
For example, my co-workers were all planning on heading to a resort together and I really wanted to go—but then I remembered my phrase. Instead, I’ll get to spend more time in New York, and I'll be happier for it.
In the future, my husband and I are also looking to take a trip to Florida in 2015. It looks like I’ll be using my phrase for a while!