Saving

Yes, Naming Accounts Can Actually Make Us Better Savers

Erin Lowry

Before I left my job late this year for a freelance career, I saved 100 percent of my side-hustle writing income. But I didn’t just sweep all the cash into one catchall account. Instead, each time I got paid, I’d put pen to paper and divide the money among four savings accounts.

A $1,200 check would look something like this:

  • $480 – Uncle Sam
  • $300 – Honey Pot
  • $300 – Other People’s Weddings
  • $120 – Mosby Fund

Uncle Sam is, of course, for taxes, and automatically gets 40 percent of my income. (Ouch.) The remaining 60 percent is split between the Honey Pot (my emergency fund), Other People’s Weddings (self-explanatory) and the Mosby Fund. Yes, Mosby, my dog, needs his own emergency fund. It’s come in handy a few times, like when he knocked out a tooth and needed oral surgery.

This helpful habit is relatively new. Despite being an aggressive saver for years, I decided early this year that I needed to kick it up. Plus, I’d gotten sick of referring to cluttered spreadsheets to learn how much I’d saved for my pup, or what I had on tap in case I got hit with a big expense I hadn’t expected. So in February, I opened several savings accounts across two banks and nicknamed them all. I know: It sounds silly. But there’s science behind it.

Why This Whole Naming Trick Works

“Most of our decisions and motivations are housed in our emotional brains, not in our rational brains. That’s why abstract concepts, such as ‘savings account’ or ‘retirement’ are not very inspiring,” says Certified Financial Planner Brad Klontz, Psy.D., founder of the Financial Psychology Institute.

Translation: Giving our savings and investment accounts names that resonate emotionally can motivate us to contribute more.

It’s worked for me. Not only do separate accounts make it easier to see how much I’ve saved for specific goals, but I really did feel an emotional connection after I selected the nickname—which then minimizes the risk of me skimming off the top. For example, the thought of Mosby getting sick and needing to be rushed to the vet pops into my mind whenever I’m tempted to transfer $100 from his account into mine. If it was named “Account #3910,” it’d probably be easier to tap it.

The More Detail, The Better

Klontz says the most effective account nicknames are those that “conjure up images, feelings and sensations—and the more exciting the better.” That’s what he aims to accomplish when creating unique nicknames for his own accounts.

So Travel Fund, say, is better than Savings. “But my ‘Italy 2018 Travel Fund’ is even better,” he says. “It includes a date, which helps, too. I can almost smell the olive trees and taste the wine every time I see it.”

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