Savings Kung Fu: How To Strengthen Your Financial Discipline

Successful saving has really only one rule: Make a plan and stick to it. The trouble with that is how easy it can be to let yourself get away with small infractions against the plan -- $5 here, $10 there -- so your mighty ambition to save perishes from attrition, suffering the death of a thousand cuts.

Fortunately, you can strengthen your saving skills with the right training program, building discipline like monks on their way to Shaolin mastery. Discipline with money is a lot like martial arts, actually. It's hard at first, but the benefits can last.

How to train your savings discipline

Rule No. 1: Establish a portfolio of savings goals

Ask yourself: Why do you want to save? Maybe there's a big-ticket purchase you're looking forward to, you've got kids to put through college, or you're taking matters into your own hands with your retirement savings. Maybe you just want to have a chunk of money at the ready, in case of emergency.

Whatever end you have in mind for your savings, it helps to know precisely what you're socking away for. In fact, if you want rule No. 2 to succeed, it's practically mandatory. Remember to set at least one short-term goal, too -- we'll get into that later.

Rule No. 2: Set up one saving account for each goal

A main vulnerability of the typical savings plan is the "big bucket" problem. That is, you take the money you want to save and you put it all in one savings account, or under a single heading in your mental budget. It can be easy to sabotage yourself when you're confronted with a large and looming sum of undifferentiated cash.

Establishing accounts with specific goals in mind helps because you know exactly which part of your future you're stealing from when you go to make a savings withdrawal. You might be more inclined to keep your hands off your savings if your pending balance transfer for that Amazon impulse buy is coming straight out of your new camera fund.