Does Naming Your Accounts Help You Reach Your Goals?
It happens to the best of us. You’ve got a totally watertight budget, covering every basic from housing to groceries to gas. You’ve even built in space for quality-of-life extras like a gym membership and a subscription to Spotify.
And for a few months the whole thing goes pretty well. You carefully watch where each and every hard-earned penny scurries off to, basking in your newfound feeling of fiscal control and responsibility.
So you decide to build in another, slightly loftier objective: a savings goal for a once-in-a-lifetime vacation or to finally replace that junker you’ve been driving since you were literally in college.
And then, life happens. Maybe that beater you’re still relying on to get to work suddenly requires a repair, or you discover that moths spent the long summer months snacking on last year’s winter coat while it was in storage. Maybe a bicycle stunt lands you in Urgent Care, delicately cradling a broken wrist.
Or maybe you just lose track of those far-fledged ambitions when you see something shiny and new in a storefront window—or by frittering away your cash on tiny daily indulgences, whether they’re iced Americanos or ice cream cones.
No matter what it is that gets in your way, it’s all too easy to lose sight of financial goals, especially when the payoff is fairly far in the future.
It’s natural to be tempted to satisfy your current self at your future self’s expense. But there are ways around this common financial trap and they might be simpler than you think.
How to Set Solid Financial Goals
Before diving into the nitty gritty details on meeting the goals you set, it’s worth taking a step back. Are you setting financial goals that are actually within reach in the first place? Because if you’re not, you may be setting yourself up for failure.
A helpful first step is to make sure you understand how much money you’re actually making, because your income may be a pretty hard limit when it comes to funding those long-term financial objectives.
Obviously, you have to meet your living expenses like housing and food before you can move on to luxuries like vacations, which is why crafting a well thought out budget in the first place could be helpful. It’ll show you how much money is actually left over to use at your discretion.
Although these kinds of savings goals don’t come with the thrill of stashing cash for a new guitar or pair of boots, you may thank yourself when your future self needs a bailout or is finally ready to clock in for the very last time after a long and fulfilling career.
If you find your earnings are just barely covering your cost of living and savings needs, it may be time to think seriously about where you can make budget cuts—or find ways to bring in more income.
Maybe you can take up a side hustle or angle for that promotion you know you deserve. And sometimes a simple way to make space for your financial goals is to whittle away at the small, day-to-day expenses that can add up surprisingly quickly.
And when it comes to that, there’s a psychological trick that may really help out.
Can This Simple Psychological Trick Really Help You Save Money?
Here’s the thing: Delayed gratification is difficult. For most of us, when we want something we want it now, and to heck with what that means for our situation tomorrow. It’s not because we’re weak or broken; it’s science! We’re psychologically, and in some cases culturally, predisposed to prioritize short-term reward-seeking behavior.
But following that impulse may be how you wound up scrounging up couch coins to pay for a delivery pizza at the end of your pay period… while still dreaming about your future trip to Bali years after you put it on your vision board.
You might be surprised to learn that the seemingly simple power of words can go a long way toward making those goals a reality. Tellingly, one 2015 study found that those who wrote down their goals—rather than just noting them mentally—enjoyed a significantly better achievement rate.
Writing down your goals makes them more concrete: The written words exist in the world, rather than just floating around in your head.
Cognitively, the act of articulating your goal and literally writing it down packs a memory punch, keeping it front and center.
It also helps clarify your goals, and may push you to come up with tactics to achieve them. And when you translate that into your financial life, it may mean naming your different accounts could be a serious motivator.
Putting Technology to Work for Your Wallet
While writing down your financial goals with pen and paper and sticking them to a vision board may prove helpful, there are other ways to go about it: One way would be separating your money accounts and naming them according to each goal. That’s where technology may come in handy.
SoFi Money® is a cash management account that helps provide a bird’s-eye view of your fiscal landscape. And now, SoFi’s rolling out a new feature called Money Vaults—which might just help you write your financial goals into reality.
The feature is simple but powerful: Money Vaults will allow you to create and customize separate folders to help you save for various goals, from your next summer vacation to that killer new ride you’re eyeing.
You’ll be able to separate out funds for the specific financial achievements you decide on. This may make it a little easier to say “no thanks” to unexpected spending opportunities that are waiting to derail you.
For instance, say you and your friends have your hearts set on a group trip to Lake Tahoe this winter for a skiing extravaganza. Those charming resorts and lift passes aren’t cheap, but if you’re dedicated and consistent, you may manage to save up for it.
SoFi Money can help you keep track of all of your various accounts and expenses in one convenient location, which you can access from the comfort of your smartphone. And with Vaults, you’ll be able to create a subfolder specifically for your vacation. You can name it “Ski Trip” or even “Shredding in Tahoe” if you want—it’s up to you!
Either way, you’ll see that goal every time you log into your Money account, which will remind you why you’re brewing your java at home and packing peanut butter sandwiches for lunch. And once you hit your goal (and enjoy your hard-earned vacation), you can log back in and create a new Vault for your next adventure or major purchase.
Keeping Your Financial Goals in Focus with SoFi Money
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