A lot of personal finance focuses on savings: saving for retirement, saving for an emergency, saving up for a car or house, all in addition to the smaller savings goals that you may have set for yourself. The problem is, it’s a lot easier to tell ourselves that we need to save than to actually stash away the money. Whether you’re currently saving nothing at all, or just not as much as you know you should be, there are a few strategies to make saving a little easier.
Part of what makes saving so hard is that it feels so unnatural. Unlike spending, saving money doesn’t give us much instant gratification. We won’t see the fruit of our saving for months, years, or decades. Even though our brain might comprehend that saving is the wisest thing to do, our impulses tell ourselves otherwise.
Make Saving Automatic
Because saving is so unnatural, we can’t rely on ourselves to continually take the initiative and stash money away. Instead, set up automatic transactions into all your savings accounts. By making saving automatic, you now have to take initiative only to stop the saving. This will help ensure that you continue to save money until you have a very good reason to put it on hold.
Save Before You Spend
Unlike saving, spending comes so natural to us. There’s always the temptation to spend every penny we have. Because of this, we should set aside our savings as soon as we get paid, and before we have the chance to spend it. If you have the option to have savings come right out of your paycheck, that’s even better. Moving the money into savings makes it a little harder to access, removing some of the temptation to spend it.
Increase Your Savings Incrementally
Learning save doesn’t typically come easily, so it likely would be unrealistic to suddenly go from saving nothing to saving 30% of your income. Changing your lifestyle so drastically would likely make you give up on saving and budgeting altogether. Instead, set incremental goals for yourself. In The Index Card, Helaine Olen and Harold Pollack compare this to weight training. They recommend increasing your overall savings rate by 1% each month until you meet your goal.
You could also work on fully funding each savings goals one at a time, starting with the most urgent. So first, you could focus on saving enough for emergencies. Once you have that under your belt, keep that going and start focusing on retirement and so on.
However you do it, just make sure that you keep sight of your final savings goals. Over time, you’ll have to make small lifestyle sacrifices to make room for your increased savings. By easing into your savings, however, you likely won’t miss the small changes for long. If you do, try to find something else to cut instead.
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- While I do strive to only write accurate information and dispense valuable advice, I am not a licensed financial adviser. All information is based solely on my personal experience and personal research and should be treated as such. Find out more.