First Person: I Can Double My Savings With the Help of Friends

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I have always heard that people who socialize a lot tend to spend more money. I've noticed the peer-pressure spending effect when I hang out with my sister. However, I never thought that the phenomena could work in reverse. In other words, perhaps I should submit to the peer pressure to save.

According to a recent article on DailyFinance, a new paper delves into the concept that peer pressure can motivate people to save more. I would love to ramp up my own savings, but am not as motivated as I used to be. Thinking back on how things were different, I realize I do have less peer pressure to save now that I did in the past. Still, I made a choice to turn things around.

Talking to colleagues about money

Even though money is a private matter, I used to work with people who openly discussed their 401(k) plans in the office setting. I never asked questions about their personal finances, but could not help but overhear people discuss their savings goals. Just knowing what my peers were saving motivated me to increase the percentage I was having deducted automatically from my paycheck.

Challenging my husband to save more

My husband also seems more motivated to save when he compares his retirement savings to mine. According to the results of the study, the people in a self-help group with their peers made four times as many deposits as people who flew solo. I decided to challenge my husband to increase his contribution to his 401(k) plan. We also increased how much money we put into our Roth IRA accounts.

Reading personal finance blogs

In addition to talking more openly with my husband about our personal finances, I decided to start following various personal finance blogs. By commenting on my personal savings goal, I felt like I suddenly became accountable. I was also inspired to read about how other people save money and learn to live on one income or a reduced salary.

Ramping up our emergency savings

After increasing our retirement savings, my husband and I talked about how much we wanted to have in a rainy-day fund. I also talked to my sister about my plan to save money instead of spend it by shopping. My sister also wants to build up her emergency account. We made a vow reduce the number of times we eat out or shop by one half. That money we used to spend will now go into savings.

Although I never hear of people joining investment clubs anymore, perhaps people have substituted that idea with financial blogs and discussion groups. I'm motivated that so many people want to have zero debt and money saved up to weather any financial hardships that come along.

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