Talking about money, you can save it

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We’ve certainly been talking a lot more about money since the economy took a tumble. And according to recent research, we need to keep on talking.

You can actually boost your savings, better afford college, cut your debt and avoid fights with your partner by talking about money. Follow these communication strategies if you want it to work for you.

Have a secret money problem? Proclaim your intent to solve it.

Do you berate yourself for never actually making a deposit to savings or whittling down your credit card balance?

Instead of turning your good intentions over and over again in your head, turn your aim into a specific savings goal and tell at least one trusted person about it. Verbalizing the goal is a first step toward accomplishing it, says Dean Karlan, a professor of economics at Yale University.

For some people, the very act of telling someone of your financial trouble and the intent to solve it is enough to spur action, Karlan says. But many will need to not only articulate their goals, but also to ask their confidantes to check back on a regular basis about their progress.

Moreover, don’t tell just one person your intent, tell a few people. Ian Ayres, a Yale Law School professor and author of the book, “Carrots and Sticks,” advises that you choose people who you respect for how they handle money and who won’t be too forgiving if you don’t reach your goal.

Research shows that the odds of success that you’ll meet your goal increase if you agree to put money at risk if you don’t meet it, Ayres says.

“It may sound counterintuitive, to say, ‘I am going to save $100 and if I don’t, I’m going to owe $30,'” Ayres says. “But it is not really wasting your money because your chance of success is greater.”

Karlan co-founded the site, which allows users to make public commitments to any goal, to designate “referees” to monitor their progress and to place a wager on meeting their savings goal. For example, if they don’t reach their goal, their wager might go to a predetermined charity.

Worried you’ll never save enough for your kid’s college? Label a separate account with her name and refer to it often.

In a recent Canadian study, participants who created a separate account earmarked for college savings, and then labeled it with a child’s name, bumped their savings rate up by 8 percent, says Dilip Soman, professor of marketing at the University of Toronto.

Participants who managed their savings online and pasted a picture of their child alongside the savings account information boosted their savings by 17 percent, Soman says.

You can expect a similar bump in savings if you make a habit of referring to your savings account by your child’s name, saying for instance: “This month I’m making the usual $100 contribution to Jack’s college,” Soman says. He also suggests labeling accounts with your child’s name so that statements reflect it is his or her college savings fund.

Robert O. Weagley, chairman of the University of Missouri’s Department of Personal Financial Planning, says it’s even better if your child is within earshot when you’re talking about his or her college fund.

“It’s like saying to the child, ‘I know you’re going to be in college and I’m planning for it.’ If the child knows Mom and Dad believe they will go to college, they’ll have a better chance of getting there,” Weagley says. Although he hasn’t conducted specific studies on this theory, Weagley says that he has seen the impact on children of personal finance clients who have shared their college savings efforts.

Always arguing with your partner about each other’s splurges? Talk about setting a “free” limit.

It’s a pervasive problem. About 30 percent of Americans have hidden a bill from their partner, and 16 percent have hidden a major purchase, according to a recent online poll commissioned by ForbesWoman and the National Endowment for Financial Education, or NEFE.

There’s a surprisingly simple solution. “Decide on a ‘guilt-free’ amount you can each spend each week, without consulting with each other,” says Bonnie Eaker Weil, Ph.D., author of “Financial Infidelity.”

Before you discuss how much each can have to splurge, you may have to figure out how much extra cash you have as a couple after paying necessary bills and socking money in savings, says Ted Beck, chief executive officer of NEFE.

Indeed, that discussion itself could spark controversy, since one partner may feel that more should go into a savings account than the other, Beck says. Start with a quiz to better understand your partner’s financial values. Then, talk out and come to an agreement on a guilt-free splurge amount, Beck says.