For many, saving money is simply a way of life, while for others it’s more of an abstract concept. Have you ever wondered what makes these two groups of people different? On the surface it seems that we’re all aware that if we want to get ahead in life we must save money. Yet, only a small percentage of consumers are able to consistently save money. We’ve come to the conclusion that there are four tools of the trade that are common amongst successful savers. We’ll be exploring these items in this post.
1. Set Concrete Savings Goals
Make your savings goals as specific as possible. For example, instead of having a goal to save between $50 and $60 of each paycheck set a goal to save $58.79 each pay period. This way you have something specific to aim at as opposed to going after a moving target. Another thing is to set your goals based upon your long term priorities and give yourself a deadline to achieve each goal.
2. Automatic Savings Plan
Chances are that if you’re like the typical consumer you’d certainly notice a 30% or 40% reduction in your paycheck. But how about a 10% or 15% reduction; would you notice that? Probably not, right? This is why you’ll often find that people who are good at saving money automatically deduct 10% of their income from their checking account into their savings account-each pay period. The premise is that, if left unchecked, it’s very easy to spend the same amount of money that we make each pay period. So an automatic savings plan helps to limit the amount that you’re able to spend per pay period.
3. Use Cash
Just as credit cards have for a long time been a way of life for many consumers, so too have debit cards. The problem is that when you carry your credit or debit cards with you it’s very easy to overspend. Experts tend to agree that this is because swiping a card makes the act of spending money into an abstraction. On the other hand, when you buy things with cash you get to see the money leaving your hands and the amount of money that’s left. Seeing this helps trigger a desire to save the money that’s still remaining.
4. Avoid the Bright Shiny Objects
A bright shiny object can be anything that distracts you and takes you away from your goals. This can come in the form of an impulse buy at the grocery store or that brand new sports car that you’ve always wanted but that’s not in your budget. The thing to remember is that if it’s not on your shopping list or if it’s not something that helps you to achieve your goals then it’s probably something that you should forego until a later date.
If you can consistently apply these tools of the trade to your monthly budget, then chances are that somewhere down the road your wallet will thank you for it. Do you have any tips on saving money that you’d like to share? Please let us know or you may like this post on our Fan Page.