For some employees, the idea of “learning to save” may feel like yet another thing to add to an already busy schedule. Yet, the answer to starting a healthy savings practice may be to focus on what to stop doing.
Employees may be inundated with advice about the importance of saving for their children’s college and their own retirement. The idea of “learning to save” may feel like yet another thing to add to an already busy schedule. Yet, the answer to starting a healthy savings practice may be to focus on what to stop doing. Many behavior change authors suggest creating a “stop doing” list as an effective way to modify behavior. Outside of the financial context, Stop Doing lists can be helpful to lose weight. For retirement saving, a stop doing list can help employees monitor bad spending habits (like take-out lunches) and have more funds to save for retirement.
Life coaches and behavior change experts say that what you stop doing is as important, or more, as what you start doing. If you, or anyone else, is stumped on how to start a stop doing list, some authors suggest asking yourself: Do you care deeply about it or do you feel compelled to do it? Unless you care deeply about an expense, or recurring cost or an activity, then it may need to go on the stop doing list. For example, if you feel compelled to join others in the daily take-out lunches, but you aren’t in love with the lunch options, or if you care more about spending time with coworkers and less about the food, then it should go on the stop doing list. According to CNBC, Americans spend an average of $3000 per year on takeout alone. This one simple stop doing action could free up a significant amount towards savings. One rule of thumb suggests that employees save 20% of their annual income for retirement and emergency expenses. If the average American earns $50,000 per year, then by applying that rule of thumb, they should be saving approximately $10,000 per year. The average take out bill of $3000 would free up 1/3 of that amount alone!
The key to the stop doing list, say behavior change experts, is that it helps their clients see their time as limited. By doing so, the clients reserve more time for things they want to do and less time on what doesn’t work for them. The key to the stop doing list for finances is the same. It can help employees focus on the limits of their resources or income. That is, instead of thinking of saving for retirement as finding more money or more time to make money, a stop doing list reframes the question into one that helps them make their money work better for them.
Still stumped on what to add to the stop doing list? Other examples of things to add to the financial stop doing list, in addition to buying takeout at lunch, include:
By focusing on a stop doing list, employees may feel like they can tackle budgets and expenses without feeling like they have to change too much. Plan sponsors can post a list of suggested stop doing ideas (like those listed above) to help employees find their own stop doing list.
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