Secrets of successful savers

Harness meaning

There's another powerful element to build into your new savings equation: a sense of personal meaning.

Rather than abstractly aiming for X amount, think about why having that nest egg is important to you. Is it because you'll sleep better knowing your family has emergency funds? (Turns out you really will sleep better.) Is it because you can take courses that could land you a better job, leading to better opportunities for you and your kids? If saving is just about reaching a dollar amount, that's going to be hard to sustain.

Bauer says that the Women in Red Savers create that sense of meaning -- and focus -- by naming their savings accounts. You may put only $10 a week into your "new interview suit fund," but visualizing that new suit (and maybe a new job) keeps you marching toward your goal.

Keeping up the momentum

More tips to get you going and keep you saving:

• Act fast. Even if you're feeling inspired to save, you can't rely on that motivation to last, Harvard economist David Laibson says. "That feeling of excitement and momentum is temporary. Don't take it for granted," he advises. Now is the time to take action.

• Get support. Enlist the help of friends, Laibson adds: "Tell someone about your savings goal, and ask them to help you to do it." That's why I finally joined the Savers, after promising to do it two months ago. I realized that I needed the accountability -- and the camaraderie -- to help me stick to my goal. That's what enabled my husband and me to pay off our last bit of credit card debt, so I know the Women in Red method works.

• Save your savings. While conducting a study of how consumers think about saving, Peter Tufano, a professor of financial management at the Harvard Business School, realized that many people confused discounts on merchandise (e.g., "My coat was 50% off!") with saving actual money. Skip the misguided spending-to-save routine and instead focus on saving your savings, he says. For example, if your grocery receipt shows that you "saved" $7.49 on items you bought that day, go home and put that money aside.

• Make it easy. What are your likely sources of self-sabotage? Shafir, the Princeton psychology professor, recommends making a list and then avoiding them: a particular store, a favorite Web site, certain products or a shopaholic friend.

"Self-control is tiring," says Shafir. "Arranging your life so that you confront fewer temptations is a wise thing altogether."

Join columnist MP Dunleavey and a group of women as they seek to strip away the myths around money, liberate themselves from debt and find financial sanity. Follow the continuing quest of the Women in Red every other Wednesday.

Published March 25, 2009

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