Many people view money as a touchy subject. Even your significant other may not be an exception. There is an assortment of ways to help your loved one understand the value of money. Related to that point, you can help them develop good money habits, especially through saving.
Your partner is never too young to start learning about money. You can help them by thinking big, thinking small, using visual aids, or even turning the journey into a contest.
Here are 10 ways to encourage someone to save money.
1. Describe a “Rainy Day Fund”
Sometimes the most important step toward saving is the first one. Before you ever try to encourage a loved one about the long-term value of money, start by describing the value of money in the short term.
Provide a few examples of situations where an emergency fund, aka a “rainy day fund,” would come in handy. These can include:
- A blown-out car tire
- An unexpected HVAC bill
- The deductible for a surprise visit to the doctor, dentist, or vet
- A busted water pipe
Ask your loved one how they would handle this kind of sudden expense. If they don’t have a great answer, use that as an opportunity to point them toward the wisdom of developing good money habits. For many people, building up an emergency fund is the first big step toward financial security.
2. Encourage Them to Start Small
Most people are neither mentally nor fiscally prepared to jump right into big-time saving or investing. If your loved one isn’t comfortable immediately devoting 10-15% of their budget toward saving, you’ll need to think smaller at first.
Give your loved one ideas about small things they can save money for, or things they can cut out of their life to save a bit of spare change. The stereotypical advice about cutting back on coffee may apply, though any small, consistent, unnecessary expense may count.
Once your loved one has gotten the hang of saving a few percentage points of their monthly income—such as $30 on monthly take-home pay of $2,000—then you can move on to frying bigger financial fish.
3. Ask How They Like Their Current Job
Everyone always seems to be longing for greener pastures. In this case, you can use that yearning to your advantage. Ask a few questions about whether or not your loved one enjoys their current job. Follow-up questions may center on future career dreams or aspirations that they may have.
If your significant other is one of the many people who would eventually like to move on to a different occupation or even a different field, figure out how savings can help them.
Perhaps they want to become a programmer but will need to attend night school. Maybe they’re content with their current job but may need additional education, such as a Master’s degree, to obtain an eventual promotion.
In any case, their future career plans certainly won’t be harmed by having some extra money lying around because they saved a chunk of change through solid money habits.
4. Ask About Their Future Fun Plans
Similarly, you may appreciate the value of learning about your loved one’s plans for fun times in the future. Whether they have a dream to vacation throughout Europe, go horseback riding on a South American beach, or learn how to scuba dive, most of these ideas cost at least a little money.
Remind your loved one that developing good money habits now will enable them to enjoy the future more. It’s hard to feel guilty about exploring a barrier reef in full scuba gear when the whole trip was paid for by money that they were smart enough to save up!
5. Ask About Retirement Plans
Career and bucket list plans are all important, but your loved one also needs to consider the value of saving up for retirement. Ask them what they expect their standard of living to be, and use follow-up questions to determine how they plan to finance that kind of life.
If they think they can fall back on Social Security, gently tell them that the government currently expects the system to become insolvent (i.e. lack enough tax dollars to function) within two decades.
If that isn’t enough to motivate them, remind your loved ones that even if Social Security is still around by their retirement age, it won’t fund enough for lavish vacations or extravagant gifts for future grandchildren. Short-term pain through saving can truly result in genuine long-term gain.
6. Use a Graph to Teach Compound Interest
A lot of people are visual learners. You can hit them with all kinds of numerical statistics, but if they can’t lay their eyes on what you’re teaching, they won’t learn a thing. If your loved one falls into this category, don’t be afraid to break out a whiteboard or even an old-fashioned pen and paper.
Use small, easy numbers on a graph to show how saving earlier in time can pay off in a big way, especially when compared to starting savings later in life. This way, your loved one will have an easier time understanding the value of money that you are discussing.
For example, you can visually demonstrate how a $100 monthly investment from age 25 to 67, with a modest 8% return, will yield over $412,000. By contrast, investing the same amount for the same return but starting even a mere five years later will yield only about $271,000. This $141,000 difference can make a bigger impact when seen on a line or bar graph.
7. Help Them Open a Savings Account
Some people’s parents never helped them open a savings account or assisted them in learning about money. If this was your loved one’s experience, you may need to aid them in reaching out to a bank to set up a savings account.
While some savers have no trouble setting money aside in a checking account, it can prove to be incredibly beneficial to have a designated area to sock money away in for savings. This article breaks down some of the most important steps in setting up a savings account.
Among other things, you can help your loved one gather the following:
- Government-issued identification
- Contact information
- A check (if opening an account in person) or routing and account information from an existing account (if opening over the phone or online)
- Money for a minimum deposit (typically $100 or less)
If you are already married to the person for that you are encouraged to save money, this step shouldn’t be too hard. You won’t have to start from scratch. Simply contact your own bank or other financial institution and find out how to add your spouse as a joint account holder.
8. Track Savings Progress Visually
After getting the ball rolling on a savings journey, your loved one will still need the motivation to keep up the development of good money habits. Similar to the step about showing off compound interest through a graph, you can use a visual aid to create enthusiasm.
Create a “start date” on a whiteboard, posterboard, or page of the paper. As time progresses, you can add points on a line graph to show the increasing amount that your loved one has been putting into savings.
If they have a specific goal, such as saving up $1,500 for a rainy day fund or $2,000 for a vacation, put it at the opposite end of the page. Your loved one will get to experience a sense of rising excitement as the line trends upward and grows ever closer to the dream goal.
9. Help Them Meal Plan
Assisting someone in meal planning is a practical way to encourage solid saving habits. Food makes up one of the biggest expenses in anyone’s budget. Every little bit that can be done to reduce this cost can be put toward future savings.
Although it requires a bit of up-front time investment, especially when you’re just starting out, meal planning can save you a lot in the long run. Food waste expert Recycle Track Systems (RTS) estimates that the typical American family wastes approximately 219 pounds of food per year.
Assuming all of that waste could have been avoided through proper planning, that amounts to $1,600 that could be saved! That number doesn’t take into account the money that can be saved by eating out less often and spending less on junk food because there is already good food waiting at home.
Thankfully, the Internet is overflowing with advice about the finer details of meal planning. For example, Taste of Home has lists and articles covering weekly meal plans for various months, holidays, and styles of food. Pick a template and try one out with your loved one!
10. Start a “Cash Contest”
If all else fails, unlocking a potential saver’s competitive streak could do the trick. Propose a challenge to your loved one: at the beginning of the month, each of you will withdraw the same amount of cash.
You will each try your hardest to save and scrimp, because at the end of the month, whoever has more cash left in their pocket will be the winner! The reward could include the loser taking on chore obligations for the next month, or the winner receiving a foot rub from the more spendy partner.
Whatever prize you settle on, a cash contest can be a great way to incentivize paying closer attention to expenses and holding onto just a bit more money at the end of the month.
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