3 Money Saving Techniques Anyone Can Use
October 04, 2017 | Jen Swanner | Financial Wellness
Did you know that around 26% of Americans have no savings set aside for emergencies? This alarming statistic doesn’t have to be your reality. There are fun money saving tips out there you can use to build up your savings for any kind of goal.
What are your savings goals? Do you want to purchase a new vehicle? Build up an emergency fund? Finally take a vacation? No matter the goal, it’s achievable using these three techniques.
Create a budget.
A budget will allow you to track your income and expenses down to the penny. Tracking these dollars will show you where your money is going on a monthly basis. You may be surprised!
The basic component of any budget will include:
- Income – what you earn (after taxes)
- Fixed expenses – any monthly bill that stays the same each month, like rent or cable
- Variable expenses – any monthly bill or expense that changes each month, like utilities
- Savings – how much money you can put toward savings or miscellaneous spending each month
Once you have a complete picture of what you spend each month, you may find there’s an area you can cut back to add more to your savings. Make sure you leave room in your budget for wants, not just needs. Small rewards make it easier to keep working toward your long-term savings goals. Not allowing yourself any fun money can cause you to burn out quickly and give up your goal.
Use your financial institution’s resources.
There are many tools at your disposal to make saving easier. Financial institutions offer items like automatic transfers for direct deposits and targeted savings accounts. These targeted savings accounts could be used for anything from vacations to holiday spending. White Rose Credit Union even has a new account that pays you a cash reward once you reach your savings goal!
Experts agree that saving is easiest when you pay yourself first. Rather than waiting to see what’s left over at the end of the month, try automating a portion of your direct deposit paycheck straight into your savings account. You won’t even be tempted to spend it because it will never touch your checking account.
How do you know how much money you can set aside each paycheck and still pay every bill on time? You followed the first tip and created a budget!
Make it a game.
The psychology of saving is rooted in goals and rewards. Saving will be easier if you set a goal for yourself, allocate rewards throughout the process, and stick to a specific methodology of saving. It also helps to write down your specific goals and share them with family and friends. Being open about these goals can keep you accountable down the line.
Example – the 52-week challenge
This challenge usually operates by setting a savings goal that matches the week of the year. On week one, you put $1 in your savings account. On week ten, you put $10 in your savings account. This continues on until the last week of the year, when you put $52 in your savings account. The total saved over 52 weeks is $1,378.
This challenge can be completed in a variety of ways. You could flip the amounts and save $52 the first week, or you could set your own custom weekly amounts. The main reason why this challenge is a success for so many is that the weekly amounts feel achievable and make saving a habit over the course of the year.
3 fun techniques to implement today
Remember to use these three strategies to reach your savings goal.
1) Create a budget and review your spending and saving habits.
2) Use the resources available to you through your financial institution.
3) Make saving a game to trick yourself into a positive habit.
What savings techniques have worked for you? Let us know in the comments.
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