It can be understandably challenging to develop a ritual of saving money if you aren’t used to having any. However, it’s imperative to save money. It’s the key to always having money. If you want to be prepared to purchase a home, save yourself in an emergency or go on a wonderful vacation, it’s important to get into the habit of saving money. Consider some of the ways you can make this happen.
1. Automate your savings.
Automate your savings account by creating up a system that pulls the money automatically out of your checking account when you get paid. When you automate the process, you don’t have to spend time thinking about whether or not you’re going to save money. You’ve already installed a safeguard to make sure it happens, no matter what.
2. Make your savings account inconvenient to access.
In addition to making sure you set up an automatic savings ritual, it’s best to make the money inconvenient to access. This means that your savings account doesn’t need to be connected to your checking account. In fact, set up a savings account with a different bank altogether. Once you do that, do not maintain a debit card to access that money. If you try to access money from that account, it’ll require a wire transfer that takes one to two days to access. In between that time, you’ll be able to think about that frivolous purchase you were thinking about making.
3. Use savings apps.
There are tons of financial apps in the app marketplace. Whether you’d like to start purchasing stock to invest your money or save automatically, you can do so with various apps. There are apps that will automatically round up to the next dollar and pull out the change from your checking account purchases to place in your savings account. When this happens with each purchase, you can easily save money without even thinking about it. It’s basically a way to save the spare change. You can use apps to keep an eye on how much you’ve spent as you’re on the go. Gone are the days where you must physically travel to the bank to get your checking account balance. With a mere swipe on an app, you can learn how much is still pending and what your remaining balance is. If you’re not great at managing your money from a digital perspective, you can always pull the money out and use cash. However, if you like the idea of automating and using technology, apps will be great assets to add to your financial plan.
4. Create goals and incentives.
If you’re just saving, but have no idea what you’re saving for, it’s going to be hard to maintain a level of consistency. Think about some of your financial goals. Think about your personal goals. If you’d love to own a few homes, start saving toward that goal. If you’d like to retire early, create a financial plan that includes saving money. If you’d like to save money to purchase your dream car, print out a picture of that car to remind you of what you desire when you’re tempted to spend frivolously. One of the rewards of this process will be seeing that number increase in your bank account. Another treat will be to see how you’re able to do something for your financial future. You can also treat yourself to smaller gifts like a cup of your favorite coffee or a nice dress. However, try to remain focused when it pertains to incentives and rewards.
5. Create a budget.
A budget keeps you on track with all you’re planning to spend, save and invest. Things to have in your budget include bills, gas, groceries, entertainment funds, student loan debt, prior loans from direct payday lenders or mortgage lenders, or credit cards. Often people forget about debt repayment in their budget, but it should be accounted for just like anything else. We also recommend not budgeting 100% of your income. Leave a bit out for the little things that come up.
As you work on these tips, it might feel unnatural at first. However, it’s best to stick with the process. Before long, it’ll feel empowering. When you can discipline yourself when it pertains to money, you’ll be able to do so much and experience so much more because you see money as a tool that provides access and opportunity.
Carolyn Coley is a blockchain reporter. She joined Smartereum after graduating from UC Berkeley in 2018.
