If you’re like most people, saving money is just not as much fun as spending. Plus, you probably don’t have great strategies for how to save. However, there are a lot of good reasons to do so, including having the ready cash to deal with emergencies and to get and stay out of debt. If you can turn yourself into a saver, you can start investing, take that dream vacation or buy the kind of house you’ve always wanted to live in. The tips below can turn you from a spender into a saver.
Set Goals
One of the big impediments to saving is not really having articulated a reason for doing so. Why should you say no to things that you want just so you can stick some money in the bank, and have it sit there? However, if you have something specific in mind that you want to do with the money, it changes from feeling as though you’re depriving yourself to feeling as though you are working toward something positive.
Examples of potential goals are to buy or build a house, to handle negative information on your credit report, to take a dream vacation, to renovate your home or to make a big purchase, like a sailboat. Although they may feel less exciting, getting out of debt and having emergency savings are also important, and you shouldn’t underestimate the feeling of freedom that doing both of these things will give you. Finally, saving for retirement is also important.
Make a Budget
People resist making a budget for a lot of reasons. Maybe they do not know the what why and how of budgeting in general, or find it tedious. Others find it stressful because it can force them to confront things like how much money they owe. Still others think of a budget as a kind of punishment, something that will keep them from doing anything fun. While the first two points may be true, these are generally short-lived elements of making a budget.
As for the third point, most of the time, a budget shouldn’t be about deprivation unless you are in some kind of emergency financial triage situation where you need to spend as little as possible, and this is only sustainable over the short term anyway. A budget should allow room for you to live life, and in fact, it can be very freeing because you’ll no longer have to worry about how much you can spend in each category. An app can help you track your spending, use that information to put together a budget, and stick with it.
Look for Ways to Spend Less
There are two important reasons to track your spending as part of creating the budget. One is so that you can be realistic about how much you allot for each category. The other is so that you can look at ways to cut back on what you spend. In some cases, this might be obvious. You can cut back on what you spend on clothes or groceries, for example.
However, there may be other ways to do so as well. For example, if you are paying off a credit card balance, you might be able to roll that balance onto a card that offers a lower interest rate. If you have student loans, you might want to look into Earnest student loan refinancing with a private lender. This can mean lower monthly payments and paying less in interest. Depending on how much you want to save, you can get really creative, such as renting out a room in your home.
Rethink Things
If you’re still struggling to save money with all of these measures, you could consider reframing how you think about financial issues. What does money mean to you? How do you feel about spending or saving it? Does your relationship with it change when you think about it in terms of time? In other words, if you break down how much you make per hour at your job and start thinking about the things you buy in terms of hours worked, they might seem less appealing. It’s one thing to look at the price on a pair of shoes and decide that even if they’re a bit pricey, you want them anyway, but if you think of them as costing you four or six or even eight hours of work, they might not be as tempting.
