Small Goals, Big Impact

Which of these goals seems more do-able — saving $5 a day or saving $150 a month?

If you’re like most people, saving $5 per day seems easier.

In reality, both goals result in the same amount of cash in the bank. 

But reframing big goals into smaller, more achievable ones has been shown to significantly boost our willingness to try to save. 

Behavioral economist, Shlomo Benartzi, used a simple study to show how framing can impact people’s choices about whether or not to save.

In Benartzi’s experiment, different groups of people were challenged to either save $5 per day or $150 per month. The people who were asked to save just $5 per day accepted the savings challenge 30% of the time. But in the group that was asked to save $150 per month, only 7% of participants accepted the challenge. 

Fewer people were willing to try to save money when the end result seemed unattainable. 

It feels easier to sacrifice a daily snack run than it does to come up with a big chunk of cash. So lean into that, and stash cash at intervals that feel achievable. Small accomplishments compound, and eventually lead to big results.

Celebrating every little win,

Team Totem