Habit Cultivation for Financial Goals: My Personal Experience

Two years ago, in October 2013, I learned about Dave Ramsey and read the information on his website as well as his book, The Total Money Makeover. My husband and I were inspired and blasted through the first two baby steps: saving $1000 in an emergency fund, and paying off all non-mortgage debt using the debt snowball. Doing those things was a huge relief, and we started working on baby step 3: fully funding our emergency fund with 3-6 months expenses.

And our pace slowed down. We had a few times we’ve had to use the emergency fund to cover various costs, and each time, it seemed like our motivation and intensity diminished.

This year, one of the goals I set at the beginning of 2015 was to “save $12,000 in the emergency fund.” I wanted to finish it off and be done with it.

And then we needed to replace our car. Our emergency fund was down to around $1200. So very discouraging. There was no way that we would finish it by the end of the year.

Don’t get me wrong: we were still in a better place than we were when we started. We haven’t put anything on a credit card in two years! But we were stagnant; we weren’t moving forward.

And then I realized that focusing on the end number might be what was killing our motivation –  similar to how focusing on a “goal weight” while dieting can make every day choices and changes seem to not matter. So I thought, “what if, instead of chasing the end goal of a certain number, I focused on cultivating the habit of the ACTION of saving?” So, as I had done with my other goals, I got rid of the goal of the “end number,” and set a goal to make a deposit at least 15 times of at least $10 by the end of the year (this was in September). Surely I could do at least that, right? It wasn’t nearly where we needed to be, but it was more than zero. So, I started by depositing $10.

And you know what? Over the next 6 weeks, it got easier! I’ve been depositing $20 or $30 some weeks! Seeing the balance go up again is encouraging. (And we got a few hundred for the car we would have junked, so that helped too).

It was definitely an epiphany that I could apply the same habit cultivation methods to savings habits that I was using with training and sleeping and eating habits. I am excited to see if this helps us get over the low motivation hump with this goal.  We’ve tried other money management methods before with similar results: high motivation in the beginning, and lower motivation later. I’m thinking that perhaps they all failed for us thus far because they required a complete overhaul of our habits overnight. Maybe if we had taken the time to develop one habit at a time, we might have had more sustainable success. Hey, just like health habits! Whoa!

Got any saving tips? I’d love to hear about them!

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3 thoughts on “Habit Cultivation for Financial Goals: My Personal Experience

  1. Here is an idea that helps people grow into saving. Use online banking to make the transfer automatically on payday and gradually increase the amount. For example you can increase 1% each month

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  2. Pingback: How to Set a Sustainable Habit Goal This Year: Part III | Power, Peace, and the Porch Gym

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