4 Helpful Tips for Saving Money
Just about everyone realizes the importance of saving money. Whether you’re trying to pay off your debts, give your kids a jump start on their education, or simply prepare for an upcoming vacation, setting aside a little “nest egg” is a key step toward reaching your goals.
The problem is, saving money is easier said than done. Unexpected bills come up. Income may fluctuate. And every now and again you just need to splurge on a treat. All of these factors can add up to a lot of money flowing out of your account – and not a lot staying in.
However, there is good news. With a little self-discipline, and some careful planning, you can successfully save enough money to meet your goals. You can also make saving a regular habit moving forward. Let’s discuss 4 helpful tips that will help you save money, and how you can implement them.
1. Set SMART Goals for Your Savings
Without a savings goal to aim for, it can be very difficult to keep your spending habits in check. Many experts recommend that you make two sets of goals: long-term goals that may take several months or years to achieve, and short-term goals that contribute to those long-term objectives, but are more easily attainable.
It’s also important that you make SMART goals; in other words, goals that are Specific, Measurable, Attainable, Relevant, and Timely. For example, one SMART savings goal could be: I plan to set aside $5 for every $100 I make this month, and deposit that money into my savings account.
In this regard, developing a budget is one of the most important steps you can take towards saving money on a regular basis. To create a workable budget, you’ll need to know at least 3 things:
- The amount of income you make each month
- The amount of expenses that you incur each month (bills, debts, fuel costs, etc.)
- Where the remainder of your income goes each month (e.g., do you spend a lot of money on dining out, fashionable clothes, entertainment, or other luxuries?)
With those 3 pieces of information in hand, you’ll know where you need to cut back on your spending, and how much money you can reasonably save during the course of a month.
2. Limit Access to Your Savings
For most people, savings go into a designated account at their bank (although some people still stuff money under their mattress, so that’s always an option). Wherever you decide to keep your savings, it’s a good idea to limit your own access to them. After all, it’s not quite as tempting to dip into your savings account when you have to go through all the trouble of visiting your bank, making a withdrawal, and then making your intended purchase. Sometimes erecting some self-made barriers is the best way to keep your spending under control. And this is especially important because of the next tip…
3. Avoid Impulse Buys
Impulse shopping (and its close cousin, “retail therapy”) is a real and ever-present danger to your savings strategy. Research indicates that a whopping 84% of shoppers have made impulse purchases at least once in their lives (and that number would probably be higher if the other 16% were being honest with themselves). In addition, 54% of American shoppers have admitted to spending at least $100 on an impulse buy, with 20% spending at least $1,000!
Basically, impulse shopping is bad news when it comes to saving money. The question is, how can you steer clear of impulse buys? The key is identifying your impulse buy “triggers,” and avoiding them at all costs. For example, studies show that more women than men tend to make impulse purchases when they’re feeling sad; on the other hand, more men than women make impulse buys when they’re intoxicated. And everyone is most likely to make an impulse buy when they feel excited.
The point is, figure out what your triggers are, and then take steps to neutralize them. Some people enforce a “cool-down period” before committing to a purchase, which is one excellent way to avoid spur-of-the-moment purchases that you may later regret.
4. Make Saving a Habit
How long does it take to form a new habit? 21 days, you say? That’s the most common answer you’ll hear, but it’s not the most accurate. Actually, a 2009 study found that it can take anywhere from 18 to 254 days to form a new habit, with 66 days being the average amount of time needed for the desired behavior to become automatic.
What does that mean for you? Two important things:
- It takes time to make saving a habit, so you need to start right now. For example, if you receive some extra money as a gift, immediately deposit it into your savings account, instead of spending it on a fun gadget from Amazon or a pricey take-out meal.
- Whether it takes you 14 days or 114 days to make saving money an “automatic habit,” odds are you’ll make some mistakes, and suffer a few “relapses” into unwise spending. If that happens to you, don’t despair! If you keep working towards your saving goals, and keep cultivating your self-discipline, then you’ll eventually reach your objectives – and become more financially responsible in the process.
The ABCs of Saving
Granted, there are a lot more saving strategies that you can explore, and not every method is equally effective for different people. But the 4 tips above are like the “ABCs” of saving: if you can master these basic suggestions, then you’ll be well on your way to meeting all of your savings goals.
Of course, if you get low on funds in the meantime you may need a little boost to get back on your feet. If so, reach out to our team at Koster Cash Loans for some short-term financial help. We’ve been providing quick cash loans with flexible payment schedules to Las Vegas residents for years. Reach out to us today to learn more!