Column: How To Coach Yourself To Save An Extra S$500 Every Month

Alevin K Chan

Alevin K Chan

Last updated 31 July, 2017

Got a big goal to save up for? Telling your friends or becoming your own money coach can help you get there.

Funny Money is a column by Alevin Chan that examines our irrational relationship with money. Why do we rather splurge on a holiday than pay off debt? Why do sales cause us to buy things we don’t need? Why is it ok to drop S$1,000 on a new watch, but not to upgrade our Medishield plan? Join us as we take an up-close look at how funny money can be.

It can seem hard to make any meaningful headway when it comes to managing our personal finances. All too often, any successes we clawed our way to turns out to be short-lived, putting us back in square one every time we catch wind of the latest Scoot promotion. Why is a relatively simple thing like saving money so hard to do?

Well, perhaps it’s because we’re going at it wrong. We’ve been taught that personal finances is not exactly fodder for polite conversation, that it is gauche to talk about money. (Think about how embarrassing the idea of going for credit counselling seems to be.)

As a result, we’ve been left on our own to try and figure things out with our money. And judging by the wealth of information from bloggers, businesses, governments and financial institutions out there, going solo isn’t exactly allowing us to succeed.

Evidence suggests that personal financial matters are best tackled not in isolation, but with the help of a partner. But don’t worry, it’s not about confessing all your deepest, darkest money secrets, so you don’t have to come clean about your fidget spinner obsession just yet.

The key to succeeding in your financial goals is to have someone else watching your progress, as discovered by a 1950s Harvard study.

Being Observed Improves Performance

Poring through data drawn from a 1920s study on the effects of lighting on employee performance, Henry Landsberger made a startling conclusion: the simple act of being observed impacted workers’ productivity.

He called this the Hawthorne Effect, (named after the location where the study was done) and the phenomenon will go on to be recognised as one of the most prevalent biases in the field of sociological studies today.

So what has this got to do with personal finance? Well, simply put, the Hawthorne Effect states that being singled out for observation causes a boost in performance.

So, if you’re having problems reaching a financial goal, you should declare your intention to a close friend or loved one, and have them regularly check up on your progress.

The workings of the Hawthorne Effect tells us that simply taking this step dramatically improves your chances of success.

It’s Not Cheating If It’s Self-coaching

If all this sounds an awful lot like coaching, that’s because it is. However, your friend is not responsible for you attaining your goal, only you are.

Your friend (or loved one, idol or mentor you chose to help you) is simply playing the same part as those unwitting researchers way back in 1924. By giving the workers a reason to believe they are being evaluated, the researchers elicited self-generated increases in performance.

In the same way, by playing the part of observer, your partner helps you to hold yourself accountable for the progress you make towards your goals.

Knowing that you are expected to deliver on your promise (even though it is really an expectation you have placed on yourself), you are much more likely to take the necessary steps in order to complete the task.

And because success in monetary goals depends on taking the right actions (such as cutting out unnecessary expenses, maximising credit card perks like air miles and reward points, saving money by reducing utilities bills, etc), having someone observe you will make you automatically do so.

Being Consistent Is The Key

However, this isn’t a one-off exercise.

Researchers found that the positive effect brought about by being observed is often short-lived. Workers often began to slack off once they were sure the surveillance was over. As a result, productivity dropped back to previous levels.

You can readily observe this phenomenon happening all around you. As long as the boss continues to check in on you and your colleagues, asking about your progress every once in a while, you remain energised and motivated to keep chugging towards your goal.

The moment your boss starts his 3-week holiday, however, you can practically feel the entire office slowing down a gear or two.

Therefore, the key to making the Hawthorne Effect work for you is to get into cycles of declaring your intention, followed by reporting on your progress.

Here’s an example: Say you want to save S$6,000 in a year’s time so you can go on an epic Europe holiday.

Declare your plan to your best friend, and have them sit down with you each month. Their role is simply to see whether you have managed to save up the necessary S$500 for that month.

Doing this accomplishes two things. Firstly, you break down a massive goal into smaller, more manageable chunks.

Secondly, and more importantly, you maintain the psychological arousal of being observed, and get to regularly renew your motivation, ensuring you keep the dream alive.

Read This Next:

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Alevin ChanBy Alevin Chan

A Certified Financial Planner with a curiosity about what makes people tick, Alevin's mission is to help readers understand the psychology of money. He's also on an ongoing quest to optimise happiness and enjoyment in his life.


Alevin loves helping people make good money decisions. He briefly flirted with being a Financial Advisor, but quickly realised writing about personal finance is the better way to go.

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