by Madde Horn
Whether you’re saving to pay off debt, buy a house, or go on vacation, financial goals can often feel overwhelming and even unattainable. Even when we set SMART goals, progress towards long-term achievements can feel slow. Here’s some money mindful moves to help improve your spending habits.
Breaking up your goal into monthly money challenges can help you on your long-term goal journey.
Here’s how: By breaking up a big goal into smaller achievable steps, you’re ensuring you continue to put in the effort.
Examples of Short-Term Savings Challenges:
Save for the Day of the Month
In this short challenge, increase the amount you save by $1 each day, and by the end of the month you’ll have saved a sizable chunk of change – over $400
Do a No-Spend Month
During a no spend month, you only spend on essential items like food and housing. Definitions of “essential spending” vary, but the goal of this short money challenge is simple. By taking one month off from your usual spending habits, you can rack up a significant amount of cash saving.
Instead of worrying about what you’re spending or saving, focus on a daily habit or challenge like checking your account balance or tracking your transactions.
When we practice a small daily habit to achieve a bigger goal, we’re 10x more likely to achieve it.
Small things like checking your account balance daily or review your transactions daily can actually help you achieve major results. That’s why the Nav.it has built in transaction swiping.
Connect the cost of what you’re paying financially with what it costs emotionally
With transaction swiping, you come face to face with the purchases you’ve made and swipe right on the ones you feel good about, left on the ones you’re less than proud of, and up on the ones that fall between the two. This takes your spending and puts it right in your face without scrolling an overwhelming list of transactions.
Short-term goals can help you build up momentum and stay motivated.
Staying motivated is one of the biggest struggles when working towards a goal. When a goal feels out-of-reach or too challenging, you’re more likely to lose motivation and give up. Making a goal seem more manageable by splitting it into steps can boost motivation. Challenges act as smaller goals that allow us to celebrate the little achievements. In fact, the Progress Principle suggests that progress motivates us. Effort leads to progress which then leads to motivation and more effort. This forms a progress loop.
People often let setbacks overpower progress. This negative thinking pattern is called all-or-nothing thinking. For example, if you’re training for a marathon and take a day off this type of thinking could present itself as “I didn’t run today. I’ll never get in shape” despite the fact that you ran the previous days. Black-and-white thinking like this focuses entirely on the negative and often temporary moments.
In the context of money, an all-or-nothing mindset can lead you to fixate on how much debt you have left and neglecting progress or celebrating how much you’ve already paid off. Challenges can interrupt this kind of thinking by encouraging you to break up your goal. Your thoughts and efforts will shift focus to smaller and more frequent steps.
Challenges Increase Money Mindfulness
Taking the time to appreciate how much progress you’ve made towards your goal forces you to reflect on your money habits. Not only do challenges encourage you to track progress, but they also inherently require you to re-examine your habits–this is a key part of money mindfulness. Paying attention to both set backs and wins can help you on your way to being a money mindful expert.
A clear start and end date can keep us focused
How many times have you made a New Year’s resolution just to forget about it by February? If your answer is at least one, you’re not alone. 80% of New Year’s resolutions are abandoned by February. (Pro tip: setting SMART goals can help you make it past the second month.) Having smaller goals (or challenges) can help you get on track financially or stay on track to achieve your goal. Breaking up a goal into 30-day challenges gives you a clear start and end date. Each month is a new start meaning that even if you don’t succeed on one challenge, the bigger goal is still attainable.
As humans, we don’t like leaving tasks incomplete. The Zeigarnik Effect suggests that people actually remember interrupted tasks more. A month-long challenge requires daily efforts to complete. Our avoidance of leaving a task incomplete fuels us to complete challenges. Once you’ve already put in the effort, you’ll be more determined to complete the challenge. The key is to build up momentum early on.
Our brains like challenges
Challenges are a great way to trick yourself into having fun while working towards your goals. When it comes to work, gamification increases motivation by 48%. Applying this to your money goals is a great way to get your head in the game. Gamification works for the same reason we find games addicting, of course.
Think of Super Mario Bros. While the game has an overall objective, it is also broken up into different worlds and each world is divided into different stages. After completing a stage, you move onto the next and, eventually, onto another world. It’s this progress that keeps players engaged. Gamification can use challenges and short-term goals to keep you engaged in your mission when it comes to money.
Self-competition is motivating
Humans like competition. Just remember, when it comes to finances your only true competitor is yourself. We aren’t competing with each other, just our own past habits. Competing against yourself means you can continuously raise the bar (just make sure to celebrate your accomplishments first). Competing with yourself leads to not only goal achievement, but to self-improvement as well. A measurable challenge can provide you with a target to hit so you don’t give up too early.
Nav.It wants to challenge our community to reach their financial goals
We want to see the members of the Nav.It community achieve their goals. Join us in monthly expense challenges so we can all save more, spend less, and live financially well. The first challenge: Spend less on your utility bills than the previous month.
How to Practice Money Mindfulness with Expense Tracking
How to Set Goals and Track Your Financial Progress
How Tracking, Mindfulness, and More Can Help You Accomplish Your Goals