Saving is not an easy thing if you are used to spending. There is no immediate reward so it is just not as satisfying to squirrel cash away into a savings account. Saving is a necessity though, at least if you ever plan on retiring, so if you have a problem saving, you need to make some changes. Here are some tips that will let you do just that.
1. Go Old School
If you need the visual reward, go old school with a change jar. You might be surprised at just how much they collect and since most banks now have change sorters, it is easy to count the money up and deposit it. Feel free to toss bills in there to, there’s room for everybody.
2. Turn Good Decisions Into Instant Savings
With saving money, it is all of the little things that add up. Turn these little things into instant savings that you can see. If you decide not to get that Starbucks coffee, open your bank app and transfer $5 to your savings. Go to the dollar theater instead of hitting a new release matinee, transfer $10 over. At the end of the month, take a look at all those little transfers and see just how much the little things matter.
3. Establish A Spending Limit
It is easier to break down a spending budget by the day than by the month. Give yourself a daily limit and stick to it. Any money leftover at the end of the day can be transferred over to savings. If you are bad about self control, give yourself your spending money limit in cash. When it is gone, it is gone. What is left, goes in the coin jar.
4. Set A Goal
Just mindlessly putting money away is boring and leaves you with no motivation. Set a goal like saving for a home, taking a dream vacation or retiring at a certain age. When you are tempted to make bad financial decisions, you can look at your goal and hopefully come to your senses. When I think I need money to buy a new video game, I might think about my vacation goals and change my mind. It works as simple as that.
5. Take Advantage Of Employer Retirement Programs
If your employer offers a retirement program like a 401K, contribute to it. If you can max out your contribution, that is the best thing to do. If not, at least max out the employer contribution. Not doing so is just throwing money away.
6. Save With Every Check
You should be making a savings deposit with every paycheck. If your checks are auto deposited into your account, you should also automate your savings. Set up automatic transfers to your savings account the same day as you get paid. Out of sight, out of mind is the idea here. If you never see the money, you will not miss it. Eventually, you will forget that savings transfers are even taking place.
7. Use Reward Cards Smartly
Instead of using your debit card, use a rewards card. With a cash back card, you could be earning 1 to 2 percent back. Cash that money out each and every month and put it into your savings account. Just be absolutely sure to pay that card off each and every month. Carrying a balance with interest would negate your savings pretty quick.
8. Separate Your Savings From Checking
They are obviously going to be two different accounts but they do not have to be at the same bank. If they are at the same bank, you have the ability to do instant transfers which could lead to some problems. If they are at separate banks, a transfer would take 1 to 2 days. This makes the money still accessible but gives you time to think about your financial decision.
9. Set An Instant Purchase Limit
Set a limit for what you can buy without a cooling off period. For example, anything over 100 dollars. If you are thinking of buying something over that amount, make yourself wait for a day or two. If you still want it at that time, get it. Chances are good that you will not. A cooling off period can help you avoid impulse purchases that you will regret.
10. Turn Windfalls Into Huge Opportunities
A windfall such as a bonus from work or tax return is far too easy to waste. Use the opportunity to add to your savings instead of blowing all of the money. Save a portion of it, at least 50% and then use the rest of the money to treat yourself, guilt free. Let’s say you get a 1000 dollar tax return. Take 500 dollars and buy an apple watch guilt free after saving the other half of the money. It’s a win for you and your savings.