What motivates someone to change their financial behavior? For example, can someone who is prone to spend every dime really be turned into a saver?
Fear can certainly be a motivator. For some it takes a tangible, in your face type fear like “I will lose my car if I can’t make the balloon payment that’s due in three months”. The force behind saving to avoid losing your wheels can be powerful. But when the pain goes so away, often so does the temporary positive behavior. But still, something kicked in that worked. I call this phenomenon, “adrenaline induced” financial behavior change.
Others are learning that adrenaline inducing techniques can work in more sustained, positive ways.
Inspired by a Harvard professor who combined the attraction of winning prize money with a savings program, a group of credit unions in Michigan created the “Save to Win” program. Members who put $25 or more into a Save to Win one-year CD are entered into a monthly “savings raffle” for prizes up to $400, plus one annual drawing for a $100,000 jackpot.
The outcome? In a 6 month period the program attracted over $3 million in new deposits – many of which were from people who not been successful saving in the past.
Changing our financial heart rate, whether it’s a chance to lose big or win big looks like it has real possibilities. For me, longer term financial outcomes can change my heart rate if I let myself dream about something of value in vivid detail.
What financial outcome, if you really thought about it, would elevate your heart rate? If you can get really “pumped” about it, change will not be far behind.
