Persuade Someone to Save Money

If you have a friend or family member who is in financial despair, you may feel inclined to suggest that he make better efforts at saving. However, doing so may cause some hostility. Therefore, learning how to persuade someone to save money may be your first step before approaching him. Your next step is to sit him down and bring up the discussion diplomatically, and in doing so, consider these additional steps.

Steps

 * 1) List the many benefits of saving money, such as having an emergency fund incase of job loss or major home repairs. Additionally, saving for specific purchases that are necessary is a great benefit because it means avoiding interest and finance fees when using a credit card or getting a loan. Additionally, saving money often leads to less financial stress and offers a sense of control.
 * 2) Back up your advice by proving personal examples when trying to convince a friend to save money. You don't want to be the kind of person who makes suggestions that you yourself cannot follow. You don't have to disclose your personal finances, but offer examples of how you manage to save. Do you take a small amount out of each paycheck? Do you have different funds that you finance on a regular basis, such as an emergency fund, car repair fund, vacation fund? By proving your personal success, you are offering a real life scenario that works, so your friend can see that his efforts will be rewarded.
 * 3) Motivate your friend to build savings by informing him of the rewards of saving. Not only will he be rewarded by achieving monetary goals and establishing an emergency savings account, as well as purchasing those much needed items, but he will also have a feeling of self reliance. This will, in turn, build confidence and he will be more inclined to remain focused on his goals.
 * 4) Find out your friend's weakness to bolster motivation. For example, if your friend shows guilt or shame for not being able to save, then enhance those emotions. If he has contempt for bankers then convince him to save so he doesn't have to take out a loan. If he loves to give to charity, then include a small savings fund in addition to the others that he can finance along too. If he is a big family man, then explain how it is his duty to create a sound financial foundation to avoid foreclosure on a home or being evicted from an apartment for lack of finances.
 * 5) Offer examples in the past where a savings fund would have been ideal, assuming there are some. Reminding him of a time that he can relive will likely affect him more than just offering hypothetical examples that he cannot relate to.
 * 6) Establish certain milestones in saving money that must be met so that your friend will feel a sense of accomplishment as he meets them. Don't set him up to fail by making the milestones hard to achieve. Of course failure to meet certain milestones may occur, and this should only encourage better results, but if the goals are too high and he never meets them, it may lead to discouragement.
 * 7) Generate a savings database or chart that shows the various funds to save for, the various milestones, and the final goal. If your friend has a visual that he can refer to, that alone will be motivational.

Tips

 * Refrain from harassing your friend about saving. At the end of the day, all you can do is offer your advice, tools, and resources, but you cannot make him save his money. Aggravating your friend may only cause resentment between the two of you.

Sources and Citations

 * http://steadfastfinances.com/blog/2009/03/07/20-ways-to-convince-someone-to-save-more-money/