Mind Your Money: The Psychology of Saving
Online Workshop

The Psychology of Saving Video Transcript

0:09
Hi everyone, and welcome to Mind Your Money, the Psychology of Saving. My name is Catherine, I’m a financial education specialist with the Credit Counselling Society, and I’m really glad I get to spend this time with you today.

0:23
Now, before we jump in, I’d like to provide a quick snapshot of who we are. The Credit Counselling Society is a nonprofit serving Canadians and our motto is we help, we educate, and we give hope. We help by providing free and confidential credit counselling appointments, and they’re designed to help you get clarity and support. We also run workshops, webinars, and offer free tools on our website, nomoredebts.org. Many people tell us that they feel lighter and more hopeful even after one conversation, and that’s exactly why we’re here.

0:58
Now, before we get into saving, let’s ground ourselves in what people commonly struggle with. We work Canadians from all walks of life, and the reasons people run into trouble are very relatable. Things like job changes, relying on credit to get through the month, medical challenges, lack of a clear budget, and of course, the rising cost of housing. All of these can happen to anyone at any time, and they all affect our ability to save.

1:24
And that’s what our topic is about today. Let’s explore that, why savings matters, what financial well-being really means, the psychological roadblocks that make saving harder than it sounds. And finally, my favourite part, a toolbox of savings strategies that you can start using right away. By the end of our time together, you’re going to understand how saving increases your financial well-being. Also, know how to set a goal you can actually achieve and you’ll walk away with at least five different strategies to jump-start or improve your savings habits. Let’s start simple. Big question why do we even save?

2:04
Savings reduces stress, it keeps us from reaching for credit for day-to-day things, and it helps us feel secure about our future and builds confidence in our ability to handle life’s curve balls. When we can save even small amounts, we’re telling ourselves I’ve got this and I’m in control.

2:24
Saving gives us breathing room, it gives us choices and it gives us confidence. Even saving $10 a week can shift your mindset. Financial well-being doesn’t come from having a huge income, it comes from feeling in control. And saving is one of the biggest contributors to get that sense of control. Financial well-being is simply the ability to meet your current needs comfortably and have the resilience to maintain that into the future. And resilience comes from habits, especially savings habits. Even small, steady savings builds resilience.

3:02
Research has shown many different things, and I want to go over a few different ones that are extremely fascinating. Canadians who actively save, no matter the amount, report higher well-being than those who don’t, even when their incomes are the same. There’s a false sense that we think making more money may mean a better financial situation for us, and the research shows that’s not always the case. That means mindset and behaviour matter more than income alone.

3:33
Another insight psychological factors like how you think and feel about money have a huge impact on savings habits. And good news, psychological factors can change. Unlike your age or number of dependants, your attitudes about money and your habits about money can and are flexible and a kind of interesting one. Financial well-being actually doesn’t increase much for those individuals falling within an income ballpark of $50,000 to $150,000. Again, it kind of puts into real thought about how making more money does not necessarily mean you’re going to feel better about your money.

4:14
Now, what about yourself? What we’re going to move into now is checking your financial well-being. And I’m going to give you 10 statements and you’ll answer from one being “never” to five being “always”. And as you go through them, notice what your gut says. Often our first instinct gives us useful insight. So let’s go through those 10 questions now.

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The first, I pay my bills on time.

4:44
Second, I put money away for my goals.

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For example, retirement, irregular expenses, emergencies, vacations.

4:56
My income allows for unplanned purchases without borrowing.

5:04
I have money left over at the end of the month after paying for food and housing expenses.

5:12
Number six, I review my budget in order to make room for things that matter to me.

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Number seven, I educate myself on different financial products.

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I believe I can stop myself from spending impulsively.

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I believe I am in control of my financial situation

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and lastly, I believe that saving for the future is more important than spending on my current wants.

5:55
So once you’re done reviewing these 10 questions and 10 statements for yourself, take some time to add up the numbers.

6:06
You can feel free to pause the video at anytime so you can take some time to reflect on these questions that were asked. Once you’re ready to move on, then we’ll move to the next page looking at assessing what these numbers mean.

6:23
Where do you stand?

6:25
When you total up your numbers? You get a snapshot of where you are. But here’s the key point. No matter where you land on that scale, financial well-being is something that you can build. It’s not fixed. And honestly, most people fall somewhere in the middle where things are OK but could feel a lot better, and that’s normal. You may also go through times of life where you’re going to go through ups and downs, where some phases of life you may feel on the lower end of the scale and other phases of life you may feel

6:56
higher and allow those fluctuations to happen. But keep your mind on the things that matter the most to you.

7:05
Now, how do we increase our financial well-being? And there are four main levers you could really pull to increase financial well-being. Number one is saving actively. Second is to meet your current commitments. Third is avoid borrowing for daily expenses. And very lastly is developing positive beliefs about your money. And we’re going to go over how to do these things within this session. These are habits that we can build over time. And like any habit, they have to start with awareness.

7:35
Now let’s talk about why savings is so hard. Because if saving was simply a matter of let’s just do it, everyone would do it. Why would this webinar exist? It really would be pointless. But our brains actually weren’t wired that way, and how our brain is wired gets in the way of us actually trying to save. First, there’s our subconscious mind. Financial psychologist Ted Klontz talks about how our brains evolve during times when resources were shared within a community

8:06
for survival. Back then, things like hoarding or even saving could actually get you kicked out of a community, which was dangerous because you couldn’t survive. Today, that ancient programming can make savings feel uncomfortable. It’s fighting this natural urge to want to give back to the community. And even though logically we know it’s good for us, only about 14 to 17 percent of people are natural savers. The rest of us have to build the skill and practice that muscle and that’s OK.

8:39
Then there’s the argument of having a present self versus a future self battle. Our present self is impulsive, it’s emotional, it feels the things it sees the things, it smells the things that we want and wants immediate gratification and wants to be satisfied in the most fastest way possible. Our future self who once retirement savings, financial security, well that doesn’t get a vote in the moment. It’s quietly sitting in the back of our head and our present self typically wins majority of the time.

9:11
So knowing this, this gives you a chance to pause. Knowing this skill, you want to take time to give power to your future self. Take a moment to pause and think about the long term actions that could result from your action to day. And finally, some of us have an external locus of control, the belief that our financial outcomes depend on luck, fate, or external forces. And if you believe your situation can’t change, you’re typically less motivated to save because you feel like it’s

9:42
under control. That’s why part of savings is also about shifting your story about your own abilities and is not necessarily thinking about what you can do. Just practice the muscle of saving. So how do we start? The best place to start with goals. But not just what the goal is, but we want to know your why. Why does this goal matter? Why is it so important? What will it provide for you? And we’re not talking about the physical needs, but the emotional and psychological needs as well. How will your life feel different? You must answer these questions before you apply any financial goal within your budget. When your goal is emotionally meaningful, saving stops feeling like a deprivation or a limit or something that hinders you. But actually, it feels like you’re moving towards a dignified goal and towards progress.

10:34
There’s a strategy called, “The Disturb”, and it’s used by financial coaches and forces you to visualize the future that you don’t want. What if you didn’t get to your goal? What if you couldn’t achieve that financial security that you wanted? What if you weren’t able to provide in the way that you wanted with the savings that you planned for? The stress, the overwhelm, the regret of not preparing, the regret of times past is sounds intense, but I can actually help your subconscious understand the stakes again. It gives power to your future self so you can make the right decisions today.

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When you visualize the future that you do want, where you feel calm, confident, prepared, that emotionally clarity can fuel commitment. That is what you’re striving for and not the area of The Disturb.

11:28
Let’s talk about setting some goals then and making goals real is extremely important. The first thing they do is to decide on your goal, the why of the goal and then writing it down. You can write down your goals using these simple prompts. So for example, my goal is whatever your goal will be because and then put in your Y. You want to achieve a by X period of time frame. Could be days, could be weeks, could be months, could be years, but that is up to you. If you’re starting goals for the first time,

11:59
we always recommend starting with a short term goal first. Something that you can achieve within a few weeks or maybe a few months so that again you build the muscle of working towards your financial goals. The last prompt is the total cost is this is where you want to do some research. It’s not a good idea to have an open-ended goal where you don’t know how much you’re going to save. It’s great to have an idea you want to save it from a home and a down payment, but if you never know how much the angle will be you may be saving

12:30
forever and not really have a finish line for your goal. Very lastly is I will save X dollars per pay. Once you know how much your goal is as well as the time frame you need to achieve that goal, you can break down the numbers into bite size pieces and will allow you to understand how much you need to save per pay to achieve that goal instead of some vague wish and now turns into a concrete plan with actionable steps. When you write it down, something shifts. You begin treating it like commitment instead of something hopeful that has an arbitrary end.

13:09
Let’s make it happen. Let’s bring your goal to life. Create separate savings for each goal. This helps you organize your money and prevents you from accidentally using your savings for something else. Label them in ways that make you smile, makes you feel excited about it. For example, call it the Spain Trip, the Future Me Fund, the Better Me Fund, Car Freedom Fund. Have fun with savings. The more fun and personal that you can create that name, they’re more likely you are to save.

13:39
You can also think about incorporating your senses. Visualize your goal, draw it, create a photo collage, create a dream or vision board per reminders on your phone wallpaper are subconscious response to sensory stimulation all around the area of giving our future self power far more and it’s way more powerful than abstract ideas. When you keep your goal visible, your brain stays connected to it. And lastly, another tip is to automate their savings. Automation is one of the most powerful savings tools that we have. You decide once and your future self benefits every single month.

14:21
Understanding your money values also helps your saving feel more meaningful. Remember we talked about not just rating your goal down, but you have to know your why. For some of us, money may mean safety. Others it could be for freedom or for adventure, generosity, or giving back. There’s really no wrong answer, but you have to know your why. What is pushing you or driving you to commit to this goal? Your values can also help you prioritize. We may have 2, 3, 5, or 10 different goals we want to achieve, but you have to prioritize what your values are in order to know which goal you need to work towards first. For example, if family closeness is a value, pay more to live nearby isn’t overspending, it’s alignment, because values guide goals.

15:12
Let’s move into talking about the locus of control. Earlier we had mentioned that having an external locus of control can be a barrier to saving. People with an internal locus of control, like people who believe that your own actions can influence outcomes, tend to have better financial well-being. The good news? You can practice and build this. If you feel like you have an external locus of control, you want to write down your goals and break them down. Notice and celebrate small wins. Allow yourself to enjoy the moment and know that your actions contributed to a victory. Practice positive self talk, seek support, and all of these are going to strengthen your belief over time that you can shape your financial life and your actions can directly benefit yourself in the future.

16:05
What about time value? One of the most powerful mindset shifts is learning to think of purchases in terms of hours worked and not just one purchase offhand. For example, if you earn $20 an hour and something costs $200 an hour, that’s 10 hours of your life. When you see your money as time, your decisions become clearer. Ask yourself, is this product worth 10 hours of your life? And it’ll give you more clarity whether or not

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that purchase may be worth it.

16:38
Controlling your impulses, resisting borrowing is a skill. When you’re tempted to borrow, take a pause.

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Ask yourself, can I go without it for now?

16:50
Can I use savings?

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Am I willing to use my savings? Can I earn a bit extra for a week or maybe cut one expense for a month to make the purchase and not have it be an impulse buy I feel guilty about later on? Each time you break the pattern of borrowing for basics, you gain power and confidence and control over your money because you know it’s going where it’s supposed to go and towards something that’s meaningful for you.

17:21
Now this is where things get kind of fun. Let’s talk about strategies to make savings easier. What about a rounded up strategy? Let your bank round up every purchase of the next dollar for you and save the difference. It adds up way faster than you think. Most of the big five banks have something like this available if you can ask them to activate it. Having your money buddy accountability, it works. Choose someone who also wants a build good financial habits and celebrate the feeling

17:51
of progress together. Research has shown that the feeling of achieving something is way more powerful than the physical thing itself. So share that victory with a friend. Risk your values. Think about giving a friend $20 or maybe even $100 if you feel confident. If you achieve your savings goal, you get it back. If you don’t, they’ll donate that money to A cause that you don’t like or have values that you don’t support. This is extremely motivating,

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pulling in your heartstrings. Put a photo of someone important to you on your savings jar, or maybe through your debit card, and make accessing that money or that card something you have to consciously breakthrough. Whether that’s breaking the jar, ripping the piece of paper off, tearing through the sticker. It creates just enough emotional pause to help rethink impulse spending.

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And lastly, make sure to save the extras. Often we say things like, I saved on this item, I saved on my groceries, I saved on my personal care products. But how much should we actually save? Do we actually put the savings into a savings account or do we just leave it in our checking account for the next time we do an impulse buy?

19:00
Probably the the second option. Hey, so raises, refunds, discounts, skip purchases. Any time that we actually have an increase to our savings, move that money to savings immediately. Then you this is where you’re going to see that you get an immediate gratification for the choices that you make. Little bits become big amounts over time.

19:23
Let’s talk about fun challenge based savings. Now. We’ve got a lot of different creative savings challenge ideas, so let’s talk about these now. So the first one is an empty 2 liter pop bottle, if you didn’t know this already. But if you fill an empty 2 liter pop bottle with Dimes from the bottom all the way to the top, by default you’ll roughly get about $700 worth of Dimes within that pot bottle. Pretty neat. The second idea is a 52 week money challenge and how this one works is that you would save a little bit every single week for 52 weeks. Some people like to start at the beginning of the year or the end of the year, doesn’t really matter. You can start it next week if you wanted to, but it matches the 52 weeks of the year. You put a dollar for the first week, $2 for the second week, $3 for the third week. You continue on this trend until you hit 52 weeks and you have a little over $1,300 in a savings account for whatever your personal goal will be.

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Nickel a Day Challenge. This chart will show that a little bit each day increases slowly, but grows to over $3,000. So again, putting a little bit aside, increasing it by a 5 cent increment each day can add up to quite a bit.

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Weekly savings challenge. This challenge adds a dollar more each day of the week. And if you do that, you’ll also be able to save a little bit for yourself. And the holiday savings countdown, a 35 day reverse savings countdown that allows you to save a little bit for the holidays as you prepare for the December month. These work because they build habit or momentum over time. None of these challenges will help you have thousands of dollars at the end of the the challenge. But if you’re able to save

21:08
a little bit, just like these challenges have mentioned that you can save and roll over these savings into a long term personal savings goal.

21:19
Some final money tips. Find a goal that you’re excited about. Remember, it’s not just about writing it down. You have to know the why and know that aligns with your money values. Take one action step to day. Start saving, even if it’s just a dollar on a regular basis. You’ll be surprised how much you can save over time and when. And if you do slip up, be kind to yourself. Practice self compassion because that keeps you going far longer than self criticism ever will.

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Now today, we explored why savings matters, why psychology influences our habits and plenty of different strategies that you can apply to your day-to-day savings and how to make it all feel smoother and more natural. My hope is that you leave today feeling more equipped, more confident and more empowered to take the next step. If you ever want to take advantage of our free and confidential credit counselling sessions, don’t ever hesitate to give us a call. Thanks so much for joining me today and thanks for being here.