A Simple Way To Make Saving Money Less Scary
Make big scary goals, smaller and friendlier with this framing technique
"You don't have to be great to start, but you have to start to be great"
For many people, the hardest step to achieving a savings goal is the first step—saving your first dollar and committing to a savings plan.
Read to the end of this article to learn how reframing big savings goals into smaller, more manageable steps can dramatically increase the odds you start saving.
A real-life experiment in reframing long-term savings goals
In a 2019 study, researchers asked new users of the fintech app Acorns if they wanted to sign up for a recurring savings plan.
They framed the requirements of the savings plan in three different ways:
The people who received the $5/day framing were four times more likely to sign onto the savings plan than those who received the monthly framing—which is the standard way almost everyone discusses savings plans.
Another interesting finding was that those who received the $5/day framing were slightly more likely to quit their savings plan after one month. Although the researchers noted that the $5/day framing still resulted in the most long-term savers due to how many more signed up compared to those who received monthly or weekly framing.
Making a savings goal more granular (daily rather than monthly) increases the likelihood that people start saving money
Making a savings plan granular may not help people stick with their plan long-term
Let’s dig a little deeper so you can begin to understand the psychology behind saving and how you can use it to your advantage.