Accomplishing financial goals does not happen by chance. It requires adequate preparation, beginning with a well-thought-out plan. The importance of preparing for economic and financial success is evident in this year’s Economic and Financial Literacy Week (EFLW)¹ with the theme ISAPLANO: Bagong Philippine Development Plan para sa Patuloy na Pagsulong.

Since continuous economic and financial progress can take place over an extended period, financial plans need to be long-term as well. On a personal level, one of the most important considerations when planning for sustained progress is developing good habits.

The Power of Habits

Tying shoelaces. Looking both ways before crossing the street. Having coffee in the morning. Taking a bath daily. What do these seemingly simple actions all have in common?

Those are automatic. It does not need willpower to perform. Well, maybe except for daily baths, which some people loathe. But for the most part, doing these things requires neither excruciating effort nor daily reminding.

In other words, these actions are habits.                     

Habits are the decisions being made  or the acts regularly performed that are hardly thought  of and have  become second nature to people.

Habits are important because people become what they repeatedly do. If one regularly gives to  church, community, or the needy, the person becomes naturally generous. If a person  exercises regularly, he/she becomes and stay fit.

But habits go both ways. Unhealthy eating practices will make one sluggish and sick. If a person  regularly reports to work late, his/her career growth may also be delayed because the performance and output inevitably suffer.

As the late Mahatma Gandhi once said, habits become values and in turn, become our destiny. Hence, the need to be intentional with one’s habits.

Developing the Habit of Saving in Banks

More than just ensuring available funds for future needs and wants, saving money in banks provides key benefits such as safe and convenient financial transactions, and deposit protection provided by the Philippine Deposit Insurance Corporation (PDIC). But despite these advantages, many still struggle with developing the habit of saving money in banks because of insufficient funds and perceived difficulties in opening and maintaining a bank account, among others.

Fortunately, The habit of saving in banks just like any other habit can be developed, particularly by applying the four rules of behavioral change that bestselling author James Clear taught in his book Atomic Habits.

To help remember to perform specific actions regularly, one needs need very obvious habit cues or triggers. For examples 1 and 3 above, a coin jar or savings envelope can be put in a highly visible area of their home to constantly remind them  of the intended habit. An automated reminders can also be set using apps like iCalendar, Google Calendar, or MS Calendar to make sure one does not forget to implement the plan to save.

Rule #2: Make the Habit Attractive

The more attractive an action is, the more likely a person will do it. But if an action is not that appealing yet, a strategy that Clear calls “temptation bundling,” can be done, i.e., partnering an unenticing action with an appealing one for added motivation. For example, a person can drop by the bank’s cash deposit terminal on their way to the gym for an after-office workouts or visit the bank before taking a hearty lunch break in the office. There is nothing like a back-to-back combo of feeding one’s savings and tummy..

Rule #3: Make It as Easy as Possible

In developing a savings habit, “how often” is more important than “how much”. Consistency is more important than amount because what a person really want is to make the action automatic. The easier it is to do, the higher the chances of successfully developing the habit of saving in banks.

Here are some bank saving hacks to make developing the habit as easy as possible:

1. Setting a low minimum amount for every deposit. Many banks today offer Basic Deposit Accounts (BDA) with required initial deposits of up to P100.00 only and no maintaining balance.
2. Designating a trusted person (e.g., spouse, family member, etc.) to make regular deposits to the account if going to the bank during business hours is not feasible.
3. Automating fund transfers to a savings-designated bank account via mobile banking apps or online banking platforms, where available.

Rule #4: Make the Habit Satisfying

Finally, there is need to make the habit of saving in banks satisfying in order to make it stick. The more fulfilling it is, the more likely a person is to repeat the actions until it becomes automatic. Some of the ways this can be done include:

1. Tracking deposit transactions and running balances. When we see our deposit slips or transaction confirmations pile up and our current balances increase, we can feel satisfied and encouraged to continue depositing regularly to our bank account.
2. Rewarding ourselves when we perform savings habit-related actions, e.g., buying a book, getting a massage, or watching an extra episode of our favorite series. The reward can be simple as long as the satisfaction it brings is genuine and the cost of the reward is less than the amount we save.

Saving money in banks is a behavior that one must learn and constantly practice to ensure a bright future. Fortunately, these habits can be developed and embodies by applying the four rules of behavioral change identified by Clear in his book: Make it obvious (clear and easy to remember), attractive, easy, and satisfying.

To learn more wise habits to save in banks, check out the PDIC’s 7 Ugali ng Waisna Mag-Iimpok video at https://bit.ly/PDIC7Ugali.

¹ The observance of the EFLW every second week of November is mandated by Republic Act No. 10922, also known as the Economic and Financial Literacy Act, and is aimed towards developing a national consciousness on economic and financial literacy. The National Economic and Development Authority (NEDA) leads the annual celebration of the EFLW.