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March 05, 2024

Cultivate the right mindset to achieve your financial goals

Saving money is a strategic approach to realizing goals and securing the future, but the journey can be arduous without the appropriate mindset.

The Philippine Deposit Insurance Corporation (PDIC) shares five mindsets crucial for successful money-saving:

1. Start with “Why?
To save effectively, a clear and compelling reason is essential. Whether it’s buying a house, paying off debt, retiring early, or traveling, having a specific goal sharpens focus, instills discipline in spending habits, and aids in resisting temptations. A clear “why” allows one to enjoy the benefits of saving, promoting financial stability and peace of mind.

2. Think of Saving as Future Self-Care
Viewing saving as an act of love and care for one’s future self provides a unique perspective. It enables planning for the unexpected, preparing for emergencies, and investing in personal well-being. Regularly saving a portion of income acts as a safety net, reducing stress and anxiety related to money and contributing to improved mental and physical health.

3. Focus on Developing Habits More Than Achieving Goals
Prioritizing habits over goals is emphasized, as daily habits drive consistent progress towards larger objectives. While goals may induce stress, positive habits enhance mental health and well-being by providing a sense of control and accomplishment. Concentrating on habits facilitates more significant achievements compared to a singular focus on goals.

4. Consistency More Than the Amount
Consistently saving a modest amount monthly surpasses sporadically saving a large sum. Regular savings help form the habit crucial for long-term success, facilitate faster growth through compound interest, prevent procrastination, and allow the setting of realistic goals. Consistency, even with a small amount, can lead to substantial differences in the long run.

5. Celebrate Your Savings-Related Achievements
Acknowledging and celebrating milestones, such as reaching a savings target or paying off a debt, play a pivotal role in maintaining motivation and momentum. Rewards, whether modest or extravagant, serve to recognize hard work and provide a tangible expression of the fruits of labor. Celebrating achievements reinforces positive behavior and sustains progress towards financial goals.

To save successfully, a shift in mindset from short-term pleasure to long-term stability, from limited to growth, and from being goal-oriented to habit-focused is crucial. Aligning thoughts, actions, and money-saving practices instinctively ensures that these habits will pay off in the future.