Angela Iermieri* | Financial Planner | Desjardins Group
Why do some New Year's resolutions work and some don't? I believe the ones that stick owe their staying power to the concrete results they produce.
Some of the most popular resolutions include getting in shape, eating healthy, getting 8 hours of sleep a night and spending more time with loved ones. But there's another one that I think is critical and has very good potential to stick: making automatic saving a regular habit.
Here are 4 good reasons why:
1. Not having to think about it
Saving is easiest when it's automatic. It's one less thing to worry about, and you don't even have to think about it. Regardless of the amount you want to save, it's always easier when the money is taken directly out of your chequing account and, even better, on payday. That's what's called paying yourself first!
By automatically transferring this money to a savings account, you'll be "protecting" it and you'll also be protecting yourself from the temptation of small purchases, which can add up over time and impair your ability to save.
2. Developing the habit
Together, routine and the snowball effect have a powerful impact, turning a resolution into a natural instinct. We all know that the big challenges with any resolution are consistency and persistence!
Many people hate routine. However, when it comes to your finances, it's your best friend, because it's through the consistent act of saving that the savings habit will take hold. It's the regularity of saving that, transfer after transfer, will get you closer to your goal. And as soon as you've realized your initial goal, there's only one thing you'll want to do-- start again with a new goal.
3. Increasing the transfer amount
As with any resolution, once the habit's been established, why not challenge yourself and aim a bit higher? By increasing the transfer amount slightly, you'll reach your goal faster.
If you reach your target amount faster than expected, you might achieve your goal more quickly or you might have the chance to expand the scope or add to the list. To get an idea of what the savings you put aside will be worth, use the calculator.
4. Making your dream a reality
The icing on the cake! You've seen your savings gradually grow, boosted by your regular transfers. This first test was successful: you reached the finish line, and your goal became a reality. Now you can enjoy the tangible results of what your resolution to save gave you.
This resolution will probably be easier to keep than many others, and maybe it will also inspire you to make new financial resolutions.
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* Financial Planner and Mutual Funds Representative for Desjardins Financial Services Firm Inc.