How To Trick Yourself Into Saving Money
While paying off debts like student loans might be insanely difficult to some, saving money is almost impossible. Having a savings account is necessary to make sure you’re covered for emergencies that require financial attention or for that vacation you’ve been meaning to take. But with all of the purchases you make with immediate results the prospect of saving becomes a hope rather than a reality. But there are ways to trick yourself into saving money on a regular basis.
Create A Budget
One of the biggest reasons people fail at saving money is because they don’t know where their money is going. Having a steady monthly income usually turns into a split between immediate debts (credit cards, rent, utilities…) and immediate wants (food, clothes, outside activities…). Since there is always an immediate nature to these things they all seem equally pressing. However this is not the case as only some of these items take priority over others.
The way to tell the difference between a priority and a trivial want is to make a budget. Creating a budget will clearly define what you spend each month in multiple areas of your life. Begin by accounting for everything you’ve purchased in the month prior, even if you don’t normally dedicate money to it each month. This will give you an immediate sense of where your money goes. It is also more impactful to see where your last paycheck disappeared to.
As you draw up your budget try and arrange your items in order from most expensive to the least expensive. Look to see what your top items are on your budget and see whether you need them on a monthly basis. Assessing your monthly income spending in this manner will allow you to easily identify and evaluate the items that eat into your monthly earnings.
Add “Saving Money” to your Budget
Once you have your budget laid out in front of you, see where you can eliminate nonessential purchases or monthly subscriptions and in their place add in your savings. Use the money from the things you don’t need for your new monthly addition to your personal savings. Once you start putting money into your savings it’ll become a habit that won’t be easy to break.
Keeping a savings account should be as important as keeping track of your bill payments. You might even consider making automatic deposits to your savings account whenever you would receive your pay. Since your savings take on the same importance as your priority bills you must make sure you follow the same demeanor. Allocate the same amount towards your savings every month to see your savings grow.
The main thing to remember is that your savings account is only for emergencies or big purchases, much like a credit card. If you dip into your savings every once in a while you will always end up replacing what you’ve used. Consider creating a savings account with limited access to dissuade withdrawing money prematurely. Being vigilant with your savings is the only way you’ll see constant growth.
Make Savings Goals
Staying disciplined is hard when it comes to matters of money, whether paying off debts or saving for the future. When dealing with debt it’s always a good idea to make goals so you can clearly mark your progress as you work towards debt elimination. There should be nothing different about your approach to savings.
Create strong savings goals and make sure you hit them as you continue to assign funds to the account. Once you see your savings amount grow then you’ll feel a sense of pride with each goal achieved. Soon budgeting and savings becomes as natural as paying a bill. Saving as a second nature isn’t an easy thing to accomplish but once you do it’ll open a whole new financial world for you.
Once you reach your goals, don’t think that you’re done saving. Every goal must be replaced with a new, loftier goal. Always focus on improving your savings and it will never falter. The hardest part is getting started, but once you begin you’ll find that making better goals and reaching them will be a simple task as time progresses. Consider enlisting a financial advisor to help keep you on the right path. If you have a savings account with a reputable financial institution then you can generally get advice about saving for free.
Budgeting in a savings account can be difficult if you don’t give it the same importance as anything else you pay for. Most people fail to save because they don’t see any immediate benefits for the money they make now. While it is true it will take a while to accrue a sizeable savings account, the main focus is on the future. As with debt relief, saving is a gradual process that won’t show big results unless you’re persistent in your efforts and goal chasing.