If you have trouble saving money, you aren’t alone. People who are successful savers have a few things in common. Here are some of the habits they cultivate:
Focus on a goal
If you have a reason to save, you are more likely to be successful.
- Emergency fund
- Dream vacation
- Pay down debt
- Take some time off work to pursue a business idea
- Down payment on a home
- Luxury cruise
- Purchasing your dream car
Keep your savings in a separate account so you can see it grow over time. If your goal is especially large, create milestones with target dates so you can make steady progress.
Make saving money a priority
If you only use the leftovers of your income for savings, you are undermining your own success. Instead, save first then spend. For example, if your weekly paycheck is $900, try setting aside just 5%, which is $45. Get used to living with $855 each week to spend. If have room in your budget, after a few months, bump your savings up to 10%, which is $900.
Keep increasing your savings percentage until you are a bit uncomfortable. For example, you may be able to easily pay the bills by saving 15% of your take-home pay, but struggle when you try to set aside 20%.
Limit nonessential spending
Trying to stick to a strict budget doesn’t work for most people. They end up feeling deprived and irritated. Budgets are important, but so is enjoying your day-to-day life. You don’t have to eliminate all nonessential spending to be a successful saver.
Set limits you can live with and stick to them for a greater chance of success. Instead of eliminating your morning trip to the coffee shop, try reducing your visits from five times each week to three times each week. Put the money you would have spent toward your savings goal.
Before making a purchase, give yourself 24 hours to decide if it’s necessary. This is especially important with online shopping, where it’s so easy to spend money with a few clicks.
Dedicate raises, bonuses, windfalls, and found money to savings
It’s far to easy to be wasteful when you have money that you weren’t counting on as income. If you decide to dedicate those funds to your savings goals before the money is in your hands, you’ll be successful much faster.
- When you get a 3% raise, pay attention to the difference in your take-home pay and transfer that amount directly to savings on payday.
- When loved ones give you the gift of money to celebrate a holiday, thank them and share your savings goals with them. They’ll cheer you on toward your goal.
- There’s nothing quite like pulling a $20 bill out of your winter coat pocket on the first chilly day of fall. Put it in your savings account.
- When you have an especially successful year at your job and your bonus is larger than expected, treat yourself to something indulgent to celebrate. Be sure to put the rest of the money in your savings account right away.
Keep your savings separate from the money you have available to spend
If you don’t plan to use the money you’ve set aside in the near future, consider putting into an interest-bearing savings account with an online bank. Transfers take just a few days, so if you need the money you can get to it. You won’t be able to spend it on-the-spot on an impulse purchase, though.
For long-term goals that take years to reach, consider investing the money in a conservative money market account. You’ll have the advantage of earning interest and the money will be out of reach until you reach your goal.
Search for ways to save money and put the difference toward savings
There are many apps and programs online that help you identify subscriptions you no longer use. Some even help you get refunds for services you’d like to cancel. Use technology to help you search for ways to save money.
When you find a bit of wiggle room in your budget, use the extra money to boost your savings. If you decide to eat at home instead of dining out, put the money you would have spent at a restaurant into your savings account on the spot. Technology makes this easy with phone apps that allow you to move money from one account to another instantly.
Saving money shouldn’t be difficult or painful. After all, you’ll use your savings for your own benefit in the future. It’s just a matter of gaining the skill and discipline to tell your money exactly what you want it to do for you.