Saving for life’s unexpected expenses, the holidays or for major purchases is usually something that most people don’t ever quite accomplish even though they know it is a smart financial move. The problem is that most people don’t ever even try to start saving.
What is the first step in building your savings habit?
Make it easy and automatic. The less effort you have to put into saving money, the more likely it is that you will continue. If you make it automatic than you greatly increase your chances that this new savings habit will continue.
What are ways to make it easy and automatic?
There are two really easy ways. The first is to have a portion of your paycheck deposited to a savings account which will require to you to connect with your company’s payroll department. If you want to go even easier, setup an automatic transfer from your checking account to a savings account using your mobile app. Both options will put your savings on autopilot.
What if someone wants to ease in to saving on a regular basis?
One of the best ways to ease in to saving is enroll in a 52 week challenge program. The premise is that you start with an small amount, say $1 per week and increase the amount by $1 each week. By the 52nd week you will be depositing $52. This method will net you nearly $1,400 in savings in just one year. Ideally you will be able to continue at least the $52 per week savings after the first year, would which would be over $2,700 per year saved.
Are there other ways to make saving painless from a monthly budget perspective?
One of the best ways to start a savings habit is to continue making a loan payment after you have paid a loan off. Instead of going towards the loan, you make the payment into a savings account that you have started. This makes your savings effort budget neutral and can help you quickly establish a significant savings fund.
Where are good places to find extra money to save?
One of the easiest ways to find extra money is to start using grocery store rewards cards and coupons. After every trip to the store, transfer the amount of savings you received by using coupons and shoppers cards into a savings account. This way, you are not impacting your budget and will actually see how much you save by couponing and using shoppers cards.
Are there any other easy saving options that should be considered?
If you are a person who frequently makes small purchases, instead of using your debit or credit card, begin using cash. After each purchase, save all coins and $1 bills. You will be surprised how quickly your savings will grow using this method, especially if you make several small purchases per week. In the end, all the options we have talked about require making a small change in behavior and then following through so that it becomes a habit.