Sometimes, the best way to create a savings habit is to use activities in your daily life that create opportunities to save. What exactly does that mean and how can you do that? Read a little further and you find a few ideas that you can truly use to make it happen.
What would be an example of an opportunity to find funds to save?
One example is the current price of gas. For most people, they are spending about $20 to $30 less per week on gas than they were even 6 months ago. Instead of spending that extra money, every time you fill up, also transfer $25 to your savings account. You were used to living with higher gas prices so use lower gas prices to start saving. That could net you between $500 and $1,300 per year depending upon how much you drive.
Can you create your own savings opportunities?
Yes, one of the best ways to create a savings opportunity is to use grocery store rewards cards and coupons. Most stores provide you with your savings for that shopping trip. Use the total savings on your receipt as the amount your transfer to your savings account after each shopping trip. If you weren't already using rewards cards and coupons you will be saving money you would have been spending.
What it you are just not a coupon cutter or rewards cards user – are there any options to create savings activities?
Yes, although it can be more cumbersome. Create a rule that you transfer a certain amount to savings every time you do a regular activity. For example, every time you use your debit card, transfer $1 to your savings account. Think of it as a savings premium for spending. This tool won't generate a large savings balance, but it will create a savings behavior which is very valuable and can lead to other savings activities. Many financial institutions offer the ability to round up or perform the automatic add to debit card transactions.
Why is using unexpected savings a powerful tool to start a savings habit?
If you have not been saving and are used to spending all of your monthly income, finding money to save can be difficult. This method allows you save without drastically changing your habits and behaviors. And for some people, they are not spending money on so called luxury items like lattes so advice to cut out one latte per week isn't useful. This method for savings is just finding ways to generate funds to save from everyday activities.
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Categories: Money Matters, Saving