I know there is a lot of advice on how much savings you need to have put aside, but more and more I don’t subscribe to the percentages, ranges and so forth. I just think it’s important to save and that it will always be that way. You may need to save more if you have less in your savings account, or save less if you have a lot, but we should all be saving, always.
It’s sounds like an excuse, but sometimes I find it difficult to save because of unplanned expenses for our family. However, when we’re saving consistently, it’s not really about the expenses, but about discipline. Expenses, especially unplanned, are part of life and will always occur.
I think being disciplined about savings and making it a priority forces you to figure out other ways to deal with expenses, such as reprioritizing them, delaying them until later or truly considering whether or not they’re necessary. There have been many times I thought we needed to cover an expense, but in hindsight, it wasn’t really all that important.
Well, this post kicks off a new series here at One Money Design. Over the next 5 days I’ll be sharing 20 tips to save more money! These tips provide ways to help you save consistently, and perhaps discover money that can be allocated to your savings goals each month.
In this post, I cover budgeting your savings, the importance of consistency, automation and cutting back on unnecessary spending to get savings jump started.
Budget your savings - I don’t think it’s easy to achieve savings goals unless you have the monthly goal captured in your budget. If you don’t have a savings goal listed above other priorities you’ll likely be unable to attain them each month as many other expenses are always going to come up. Simply create a category for savings so that you’re sure to allocate money to it as one of the top priorities. For example, budget $100 per month if your savings goal for the year is $1200.
Save consistently every month - Not everyone is able to save a lot of money each month. However, I do think just about everybody can save something. So, even if it’s as little as $15-$20, don’t be afraid to set that money aside as it will eventually add up, especially if it’s being invested. Investing just a small amount in your child’s education can start to compound over the years that may make up for your inability to contribute a lot each month. The most important thing to remember when savings is to get started today!
Automate your savings - I also think it’s important to automate your savings by setting up auto deposit of your paycheck to your savings account, or an automatic transfer each month. This keeps the money out of your checking account and helps avoid the chances of it getting spent. If your savings is out of sight, it’s out of mind and likely can’t be used. Pretty much all financial institutions offer this feature when you log into your account online. It takes 10-15 minutes to set up and then you no longer have to worry about transferring money to your savings account each month.
Cut unnecessary spending back to get started - A lot of people think they can’t save money each month, but often times it’s a matter of setting good spending priorities. Take the time to track all of your spending every month for two months using a software program like YNAB (click here for 10% coupon and to learn more). Then take the time to review your spending habits as a percentage of your net income. You’ll quickly see where you’re spending all your money and if it’s on entertainment, clothes or other things that may not be essential each month, reduce spending to help fund your savings goal.
What do you think of these ideas to save more money?