Financial Wellness

Why You’re Much More Likely To Save Money If You Stop Trying

Save Money: piggy bank upside down

It’s time to talk about the elephant in the room.

Many of us are living our best lives; we’re active socially, volunteering in the community, nailing our career goals, and braving every day with a can-do attitude.

Still there’s one thing, something so important, that many of us are overlooking…

We’re not saving money

When it comes to our money savings woes, the evidence is mounting up. For starters, Bankrate’s Financial Security Index recently showed that almost 20% of Americans have zero dollars set aside for emergency savings.

What’s more, a full 25% of Millennials (18 to 37) as well as 25% of Gen Xers (38 to 53) each have zero dollars saved, period.

A recent Northwestern Mutual survey of more than 2,000 people found that 21 percent of all recipients had nothing saved for retirement.

While younger generations like Millennials and Gen Xers admittedly haven’t had as much time to earn and save as their more advanced counterparts, Baby Boomers are struggling just the same. A whopping 33% of those 53 and older currently have less than $25,000 saved for retirement.

(The Bureau of Labor Statistics reports that adults 65 and older spend more than $45,000 per year on average – meaning if they don’t pick it up quickly, they will go broke before fall of their first retirement year.)

In fact, the latest annual survey by GoBankingRates finds that a staggering 42% of respondents, spanning all generations, are likely to retire broke.

A reluctance to saving money is totally understandable

Imagine choosing between these two options:

  • On one hand, you fly to Hawaii for a week. You stay at a resort, take a helicopter tour of the island of Kauai, kayak the Wailua River, hike the Kuilau Ridge Trail amidst impossibly gorgeous views of the Makaleha Mountains, eat fresh-made Lau Lau and wash it all down with your favorite flavor of shave ice on the beach with your best person. How does that feel?
  • On the other hand, picture sitting at your computer, clicking a few buttons, and transferring some money from your checking account (i.e., “come play with me!”) into your savings account (i.e., “don’t touch!”).

You’d almost have to be nuts to choose Option 2!

As far as your mammalian brain can tell, you are “losing” the same amount of money in either case. (It’s important to note that you’re most definitely not, but it can feel that way.)

“If you are trying to will yourself to save more money, you’re playing a losing game.”

The dirty truth about how to save money

Saving money can be painful, until you discover the dirty truth about how to save money that they don’t want you to know about.

That is that saving painlessly allows you to save more. You’ll be most effective when saving doesn’t rely on your willpower.

Some of us, without doubt, are strong enough to will ourselves into savings. Kudos to you. For the majority of us: If you are trying to will yourself to save more money, you’re playing a losing game.

Many have tried to save more but gotten discouraged when they failed to save as much as they told themselves they would through willpower. It can all get so you stop trying.

But here’s the liberating truth! If you’ve tried to save more and failed in the past, you’re not irresponsible and you’re not irredeemable. You’re just stacking the odds against yourself.

4 ways you can save painlessly and save more!

How do you save painlessly, without giving anything up? Make savings an automatic event, out of sight and out of mind. Here’s how you can do that now.

1) Set up a recurring transfer from your Checking account to a Savings account

It only takes a minute or two, and it’s simple to do. That way, you’ll have a constant (often monthly) stream of income to your savings, and you will never feel like you’ve given up a dollar.

It will just happen. It’s like rolling out a red carpet for your savings.

2) Be specific

Set an exact date and time that you will set up the transfer, as well as how much you will transfer and on what date each month.

Leave nothing to chance. Use the template below and fill in the data that works for you.

A Template For How To Save Money Automatically

STEP 1: On [Sunday, October 21], at [11:00 a.m.], I will open a Go Savings account, and I will make an initial deposit of [$100] from my [Unitus Checking] account.*

STEP 2: On [Thursday, October 25] (after the account is established), I will set up a recurring transfer of [$100] from my [checking account] to this savings account, to be sent on the [10th] of each month.

(That’s my birthday, so it’s extra special when future me sees what current me has done for myself and my family. J)

*If you already have a savings account, you can skip the step about opening one and jump right to the recurring transfer (unless you don’t have a Go Savings account. The return rates are so high, it’s where I have my savings and my favorite account available today. I’d recommend checking it out.)

3) Make your paycheck pay you first

If have Direct Deposit, ask your employer to send $50 automatically to your savings account every paycheck.

If you don’t have it already, talk to your manager or an HR person at work and they’ll help.

If you don’t use or want direct deposit, set a recurring calendar event to put another $50 into your savings account within 2 days of receiving each paycheck.

You can write yourself a check each time, or transfer the funds using online banking. Just make a ritual to do it right when you get your paycheck so you never forget!

This is pretty small and manageable now, right? But guess what — that $50 each paycheck (assuming bimonthly pay) will suddenly become $1,300 after a year. And after five years you’ll be looking at $6,500 (plus interest) saved up! All without giving it a second thought!

Then the fun part comes in, where you can think up any number of ways you will use that money (responsibly) to spice up your life — including deciding to keep it saved for unexpected medical bills so you can rest easy! Use your brain for fun, happy decisions, not hard, boring ones! It works better that way.

4) Contribute to your company’s retirement account plan

Most companies offer retirement vehicles like a 401(k) or 403(b). This offers two to three huge benefits:

  1. You can have your employer automatically set aside a certain percentage of each paycheck into your retirement account. Pain-free, it’ll keep adding up and you’ll never have to think about it.
  2. These are considered “pre-tax” contributions, meaning you’ll get more out of your savings compared to putting your own post-tax earnings into an account.
  3. Special bonus: If your employer has a “matching” program, they might throw some extra money into your retirement account! For free! How incredible is that? Why would an employer willingly give you extra money? Because saving for retirement is that important!

Which brings us to our next question…

Are you saving enough?

In addition to understanding the reasons why you should be saving money, can you answer the following questions, off the top of your head?

  1. “How many dollars do I have in savings today?”
  2. “If I stopped earning money today, how many months until my savings run out?”
  3. “How many dollars, specifically, do I want to have in savings at any given moment?”
  4. “Does my employer offer a 401(k) or other retirement matching benefit, and am I taking full advantage of it?”
  5. “How much money, roughly, do I currently have set aside specifically for retirement?”

If you’re having trouble answering any of the questions above, then it’s time to get your savings going.

How can you get your savings going?

My current favorite way to get my savings going, and going faster? Open a Go Savings account!

It was created specifically to reward people beginning to save. You get the highest rate of return on the lowest balances, which in people speak means it gives more money back to those of us who are newer to the savings game!

If you’re having trouble saving, as you can see, you are not alone. You know at Unitus we are all in this together, and we are always here to help you in any way big or small.

Keep living your best life…

…and let us know whenever you want to talk through a financial need.

I’ll just leave our number here: 503-227-5571, along with a reminder that our website has tons of guides and tips and blogs and other tools to help you become savvy in all things money.)

Until next time, save painlessly and make your dreams real!

Posted By: Jacob Schnee

About the Author: Jacob joined Unitus as Marketing Specialist in March 2015 and transitioned to Marketing Communications Specialist in March 2017. 

His experience has spanned hospitality, business development, consulting, and marketing in various industries along the east coast, west coast and in between.

When he is not developing internal and external communications for Unitus, he is engaging in recreational fitness, studying personality types and exploring the outdoors with his wife, dog, and baby.

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