There is a difference between saving money and saving for your future. And while you may have been taught to pinch pennies your whole life, we’re here to tell you it isn’t entirely about spending less. These seven simple steps will offer a new perspective to saving and put you on the right track.
1. Automate a Savings plan
Once you have a dedicated savings account, put an automatic transfer in place to ensure a steady flow in. Whether it’s having the payroll department at work put a fixed amount into your savings account each paycheck or setting up a fixed transfer from your checking account each month, the goal is to set it and forget it.
2. Create a budget for spending
The key to creating a budget is being honest about your spending habits and having it align with how much money you have coming in. Create a list of all of your necessary expenses (rent, car payment, groceries) including the date they’re due. Having it all in one place will help you draw a mental note and be more conscious of how much you’re spending. And if you need extra help to organize a budget, take advantage of apps on your phone. Some of our favorites are Mint and Qapital.
3. Monitor your credit
Credit can be a great tool in helping you save, but only when used correctly. It’s important to always keep track of your credit card balances and keeping up to date with payments by automating them. There are plenty of websites out there offering free credit reports and credit advice. But if you want to delve deeper into the world of credit and how to manage and utilize it to your advantage, you can get free help and advice from a credit counselor.
4. Save your windfalls
Surprise money from birthdays, weddings, graduations, tax refunds or work bonuses should go straight to your savings account. Even though it will take a lot of self control not to splurge on that pair of sunglasses you’ve been eyeing for months, you’ll thank yourself later when you see those zeros in your bank account.
5. Save in bulk instead of pinching pennies
Of course buying the generic toothpaste and opting out of the add guacamole option at Chipotle saves money, but refocus your money saving power towards larger buys like skipping out of your annual Euro trip this year or driving your dad’s old truck for a couple more years. What may seem like big sacrifices now will start to make sense and can really supercharge your savings.
6. Work more
Yes, the key to saving is in fact saving but working more and bringing in more money can help speed up the process. This might mean taking on an extra shift each week or maybe just offering to cover for a coworker from time to time. If there aren’t any opportunities for overtime or extra work, take on a part time job or new projects, even if it’s just a few times a month.
7. Replace expensive habits
Saving money doesn’t mean you need to punish yourself. It’s just about being flexible and finding other options. Instead of going to the movies every week, consider signing up for Netflix or instead of eating out, get dolled up and create fancy dinners at home with friends. There are ways to still feel like you’re treating yourself without having to spend more than you really need to.