For many people, saving is a lot like being on a diet. You have to commit yourself to making a change in your life, be willing to give some things up and stay away from all the “bad” food – or in this case “bad” spending.
Despite this, it doesn’t have to be difficult to save. In fact, there are many practical – and simple – things you can do to enhance your ability to save. We’ve put together some tips:
Tip #1: Determine your savings persona.
Are you someone who has a natural propensity to save? Or do your fingers begin to tingle when you see extra dollars in your bank account? Once you’ve established how you save best, develop a strategy that will work for you, instead of working against you.
For example, if you are someone who has a hard time sticking to a budget, carry cash instead of plastic. For example, take out your monthly budgeted amount for groceries on the 1st and then pay with cash until the end of the month or until the money runs out. This will force you to stay within your boundaries.
Tip #2: Take advantage of savings tools.
Identify products that your bank offers that make it easier for you to save, such as rewards programs or an automatic savings program like MidWestOne’s Bank Your Change program, which rounds up your purchases to the next whole dollar with the difference automatically going into a savings account.
If possible, work with your bank to set up an automatic transfer into your savings account when you are paid. Some employers even allow you to split your check and allocate a portion of it into savings immediately. This means you won’t even see the money and hence probably not even miss it!
Tip #3: Set a goal.
Establish a savings goal that will give you something concrete to look forward to when you are tucking away your dollars. Perhaps it’s a new car? Or a fancy vacation? Depending on your savings style you may even want to set up separate savings accounts for these different goals.
Tip #4: Eliminate the unnecessary “small” spending.
For example, by making coffee at home instead of buying your cup of joe from the local coffee shop every morning you could save as much as $840 per year (based on a $3.50 cup of coffee and 20 working days/month). Other things to consider are – eating leftovers instead of going out for lunch every day, reading the news online instead of paying for a newspaper subscription and setting up online bill pay to save on mailing costs.
Tip #5: Avoid carrying debt at all cost
The amount of interest that can accrue on credit card debt can quickly get out of control and land you in a vicious cycle. Make it your goal to pay off your credit card every month.
Saving for your future doesn’t have to be a painful process. With a few simple tweaks to your routine you can begin setting aside funds in no time.