Spending money is so easy to do. It is the next logical step with the constant stream of ads and the countless bills to pay. And after paying for everything, there seems to be nothing left.
But, recent instances of adversity have emphasized the necessity of preparedness. Unstable economies and natural disasters could topple those in precarious financial positions.
Increasing your savings after years of not being able to do so might seem daunting. And it is, especially if there is little to save. But if you want to make it a habit, here are a few tips to get started.
Stick to A Budget
Creating a budget is easy. Sticking to it is what’s difficult.
Of course, there are quite a few budgeting methods. The most basic one is writing down your income and subtracting from there.
You’d want to set aside money for your necessities like rent, utilities, and debt if you have any. Of course, food and water are essential. The rest is up to you and the lifestyle you lead.
There are different ways to budget. Some examples are envelope budgeting and zero-based budgeting, among others. You can look into these different styles and find out what works for you.
An essential part of budgeting is to set aside an amount for savings. To increase your savings, you’ll have to prioritize it. You can put it up there beside your necessary bills and find a way to hold yourself accountable.
Record Your Expenses
Write down each of your daily expenses. While this may seem tedious, it’s a simple and effective way to track your spending.
Why track your expenses? This way, you can have a good idea of where your money is going. Itemizing each transaction can help you identify possible areas where you can cut your spending.
Finding a tracking method that works for you might take some trial and error. It will depend on your lifestyle.
Some people prefer an old-fashioned notebook and pen. Meanwhile, others use mobile apps. You can find ones for budgeting and expense tracking with a simple search.
Learn to Prioritize
Once you’ve got a pretty good picture of where your money goes, we can get to work. If there is no change in income, your increase in savings will have to come from somewhere else.
Take a look at your record of expenses. In which areas could you afford to spend less?
You might want to consider a downgrade in your phone or internet plan. Do you have any subscriptions you don’t need? If you’re the type of person who does live streaming more than watching TV, could you live without cable?
These are only suggestions. You know what your needs are, and the best decision will come with some careful thought.
Create a Dedicated Savings Account
Creating a dedicated savings account could help you save more. Sometimes, we do our best to try to save money. But since we store that money in the same place as the rest of our budget, we’d be more inclined to spend it as well.
Having a separate savings account creates a physical (or digital) barrier. Since you’re not lumping it with the rest of your budget, access would take some effort.
Sure, it might not be too difficult to overcome, but the added steps will make you think twice.
Try finding a savings account with high-interest rates. Not only will you keep your savings safe, but you’ll also have a little bonus incentive each month.
Set Specific Goals
Are you thinking of getting a new house? A car? A vacation? Do you want to go to college? How about building an emergency fund? Set specific goals for your savings.
Having a particular goal in mind helps make your savings more concrete. It’s also an excellent way to encourage you to keep good financial habits.
You’re working towards something, and if you keep saving, you’ll soon get what you want.
A helpful way is to start with smaller goals, such as holiday gifts, a phone, or a video game. Accomplishing these smaller goals helps you gain confidence to tackle the bigger ones.
Final Thoughts
Having enough savings is a result of good habits. And, like all habits, it doesn’t come overnight. Starting a new practice is never easy, especially when it comes to finances. It takes time and commitment.
When times get hard, and your savings won’t cover your needs, you can consider other options. An installment loan is a popular choice.
Soon enough, you’ll feel a lot more secure. The more you practice good spending habits, the easier it will become.
