Solution to Saving: Find Your Inner Rat.

In the realm of financial activities, saving is rarely thought of as fun. Sure, having savings is fun, but the act of deferring today's spending for tomorrow's benefit is something we usually have to push ourselves to do.

When people try to move their needle from "spend" behavior to "save" behavior they almost always start by coming up with a goal. Not a bad idea, except that they usually start with the wrong goal. Retirement? So far away. Emergency fund? Snooze. Plus nobody likes to contemplate emergencies - especially when there is a beautifully distracting SALE! sign in that window. I'm not saying that it's not good to save for retirement or emergencies (please do save for those things), what I'm saying is that if saving is a new behavior then you need to actually learn how to do it. Walk before you run.

Learning a new behavior is a process that has ups and downs. To persevere through the downs, we need consistent reinforcement that the change is worth our efforts. This reinforcement can be negative (avoiding something painful) or positive (being rewarded with something pleasant). Failing to save for retirement or an emergency fund is huge, but those consequences are probably too far removed from the day-to-day difficulties of your behavioral change goal to be meaningful motivators.

(Many people will say that the solution to this is to automate your savings for those things, and while I agree with that, our topic today is not the savings result. It's improving the savings behavior.)

The solution to increasing the savings behavior is to make it pleasurable. You want condition yourself to save like a little B.F. Skinner lab rat gets conditioned to tap a lever and receive a cheese reward. Your cheese is the enjoyment of spending what you've saved, and in the beginning you will need these rewards to be more plentiful than after you've got some savings practice under your belt.

Start by saving small. DailyWorth has a great Save to Spend monthly budget that I think is absolutely genius. Then save for longer-term (but still fun, and not too longer-term) goals like a vacation or a splurge (iPad, anyone?). Soon you'll be such a seasoned saver that it will be easy to integrate emergency fund and retirement goals into your already established savings routine.

Tara Siegel Bernard, the New York Times journalist who interviewed me for her piece on ineffective budgets, just blogged about how she's going to establish some small, meaningful goals to improve her own savings behavior. Enjoy that trip to Europe, Tara!

The Have-Nots vs. The Used-to-Haves

Let me begin by saying I am a huge lover of DailyWorth and the amazing, talented women who run it. I'm sure this post about the new Vh1 show "You're Cut Off!" was done in a spirit of fun and wasn't intended to be mean spirited:

“I nevah knew you could spend less than $800 on shoes,” says one girl, shaking her head sadly. And you nevah knew that watching dumb rich girls would make you feel so good about your own finances.

It makes me once again shake my head at how much we as a society love to laugh when someone who comes from money gets taken down a peg. We judge them when they discover, often painfully or in some situation of comical ignorance, how the "other half" (actually the other "99.99% of us") lives. Just because the overwhelming majority of Americans know that one can -- quite easily! -- spend less than $800 on shoes, it shouldn't mean that this one individual's discovery is worthy of our scorn.

Why is it funny when a person finds that the financial conditions she's been prepared for have evaporated? (Okay, okay, it's for the sake of a reality television show here, I grant you.) Would you find it funny if all of the sudden you had to go from indoor plumbing to having to fetch your own drinking and cooking water every day? Should people laugh at you when you wistfully talk about how wonderful it was to turn on the kitchen sink or flush a toilet?

It amazes me that a country that loves to fantasize about the effects of weath simultaneously loves to demean and humiliate the wealthy. Judging those who have more than us blinds us to the privileges we do enjoy. It keeps us all in rigid little boxes about the "right" amount of money to have (hint: it's always just slightly more than we personally have).

It's wonderful that the young women appearing in "You're Cut Off!" will be learning about financial competence. Despite the narcissistic paradox of participating in a show like this ("Act like a spoiled brat! Excellent! Now cry when I take your money away! Awesome!"), I'm relieved to see that they will be working with a life coach in order to -- hopefully -- come away with this having experienced some actual personal growth.

Will that be true for the viewers as well?

Amanda in the NYT: Why a Budget is Like a Diet

One of the more difficult things about becoming a healthy adult is how we reconcile ourselves to limitations. In the US, where there is a strong cultural attachment to the value of freedom, healthy limits are especially tricky. "If some is good, more must be better! And anyone who tells me differently is trying to oppress me!"

We can get a little touchy about limitations.

In fact, healthy limits are essential to self-regulation. The key is to not get overly distracted by what we don't have, and to instead let the limitation increase our awareness of what we do have.

When our subjective financial experience is set to "broke" or "not enough," it can be very painful to pay attention to money. We spend and spend, but no amount of spending makes the feeling go away. And when that spending behavior makes us go in debt or leaves us unable to pay our bills, then we've created a financial reality that reflects our internal "not enough" state.

People are often shocked to discover that a proper spending plan can be the cure for "not enough." A spending plan requires that we establish priorities, tune in to our values, and put a dollar amount on the choices we make. It can be tough, but ultimately a spending plan demonstrates that there is, in fact, money being spent and the emotional setting of "broke" is not accurate. This can be an important first step in realigning your financial experience to one that is healthy and purposeful.

The Sustainable Money piece by Tara Siegel Bernard in today's New York Times includes more of my thoughts on how money should be seen as an energy source that helps us get to where we want to go. Hope you enjoy Why a Budget is Like a Diet -- Ineffective.