Creating a plan to save is not exciting; in fact, it can feel like you’re depriving yourself. Spending money is so much more fun! If you love to spend more than save, building good money habits can be challenging. But there are a few tricks that can help you to start a savings plan and not feel deprived.
- Make it Automatic
Make saving an automatic deduction so you don’t even have to think about. Just like paying a bill, but you’re paying yourself. Set up an automatic transfer from your checking to your savings account with each paycheck or on a set date every month. Do it as soon as you get paid so that you don’t even miss it.
- Round Up Your Spending
If you’ve ever purchased something from a charity (SPCA, Goodwill, or other charities), they have probably asked you if would like to round your purchase amount up to the next dollar as a donation. Why not make yourself a charity and round up your own purchases; it’s for a good cause! The next time you go grocery shopping, round up your total purchase to the next $5 increment and put the money in savings. For instance, if your bill is $43.10, round up to $45 and add $1.90 to your savings account or money jar. Use a store rewards card? Take the amount you saved on your grocery bill and add that to your savings, after all, without the rewards card you would have spent it anyway. If your receipt shows that your card saved you $10.12, round up and add $11 to savings. You’ll be surprised how fast your savings starts to grow.
- Think about your large purchases in hours
Looking to buy a new sofa? Think about how much time it will take you to make the money for that purchase. If the new sofa is $500 and you make $20 an hour, that’s 25 hours of work (before taxes) to cover the expense. Is that new sofa really worth more than 25 hours of work or will the one you already have be fine for a little longer?
- Think of all the possibilities
Would you rather spend $20 on a new sweater that you probably don’t need, or does it make more sense to put that money toward something you want (or need) more, like a vacation or your retirement account. Stop and think through impulse purchases, take a day to decide if you really need it or if you could spend that money in a better way.
- Imagine having the cash in hand
When trying to decide about making a purchase, imagine a stranger is offering you free money equivalent to the purchase price. For example, the stranger is holding a fabulous new dress in one hand worth $100 and $100 in cash in the other hand. They are asking you to pick one. Which one would you choose? Probably the cash! Seeing your purchases as real money can help you to make smarter choices.
You don’t need to accumulate a large savings account overnight, just a little here and there will build that account faster than you expect. Before spending, take a moment to think about what you’re buying and deciding if you really need it or need financial security more.