While we all have ambitious money goals, it’s important that we are obtaining them in a specific way. That way is building a collection of small habits that we practice every single day. By taking these baby steps that eventually become second nature for you, you’ll hopefully improve your financial situation. Below are some of the small habits you can pick up right now and grow your money over time.
Auto-transfer Money Into Savings/Investments
Naturally, if you want to be saving money, you want to be having a savings account. Better yet, opening up an investing account. While opening these accounts is relatively easy to do, it can be a chore to put money away for those accounts. Not to mention you’ve got all those bills and other needs to address. It’s so easy for those things to slip through the cracks.
With that in mind, you can remove the hassle of having to remember to do that by leveraging auto-transfers. You can determine the frequencies these happen and they are great ways to work within budgets while saving up for something you want to be getting. For example, if you want to save up $1,000 for a new computer, you can get it in six months if you set aside $42 each week and put it into savings.
Plan Your Purchases
Rather than making quick runs to convenience stores or drugstores to grab a few items, plan out all of your shopping trips. Make a list of what you plan to buy and even how much money you’d like to be spending.
These lists are saving graces as it helps you to stay focused on only picking up the items you need. It also helps you to avoid buying things that you don’t need.
This same logic can apply to buying things online beyond groceries. Take some time to figure out if you can afford to spend that money. Not to mention – determine if you really need it in the first place. Muddle your answers in your head for a couple of days before making those purchases.
If it’s not an essential item that you know you absolutely need, wait a good month or so before adding it to your purchases.
Save Money Through Substitution
Make an assessment of what’s most important to you and spend most of your time in those areas in terms of spending. In other categories that aren’t as important, consider some ways you can economize or find less-expensive alternatives.
For example, if you love gourmet cheese, don’t deprive yourself of your favourite cheese for the sake of budgeting. However if you’re impartial to what kind of peanut butter you eat, go for generic brands if you can.
Always Pay Yourself First
This is another quality that appears on every personal finance tips article you can find and it makes sense. How in the world will you be able to save money if you’re spending all of it on bills and other expenses first? Instead of doing that, you want to first set up a budget, so you’re not overspending.
While you are making that budget, you want to figure out how much money is going back into your pocket and being put into savings/investing. By setting it up that way, you can figure out how much you really need in order to survive and set aside that money while living off the rest.
Doing it this way makes sense and is better, since it forces you to think of the bigger picture for your goals. If you’re constantly paying the bills and not sure what you’ve got leftover, you won’t be making any progress towards those goals.
The best thing about all of this is that you can also set up transfers to those accounts without ever worrying about doing that manually.
Ensure Your Savings Are Being Put Into Savings
What we mean by this is if you’re making a concerted effort to be saving in several aspects of your life, you want to ensure that the money that you’re saving on that end is going towards something that benefits you. The obvious is money being put into savings or investments.
This is a big deal, as it’s so easy for people to save in those areas and think now that they have freed up more cash they can spend it in other areas outside of savings. Of course it doesn’t help much as you’re shifting money from one expense to another rather than into your savings.
Do yourself a favour and take note of where you are saving money in all things and then put that difference into investments or savings. It might not seem like much, but it can add up to a lot over time. For example, say, instead of going for a takeout every weekday, you brown bag your lunch instead.
You could save upwards of $50 on that alone. Do that for an entire month and you’ll save yourself roughly $200 each month that you can put into savings and watch that money grow over time.
Got A Bonus? Go And Save It
From raises to tips or higher earnings from your side-gig or from freelancing, any surplus of money you get beyond your typical earnings ought to be put away for a rainy day. While these days or months are great, it’s important to be practical.
Instead of blowing all of that money away, make a point of taking a percentage of that (if it’s a lot) or all of it and set aside for savings.
Have Plans For Spare Change
While paper money and coins can be archaic these days, there are periods of time where we do have cash or change on hand. These things can weigh down our wallets over time and in general take up space.
Instead of lugging them around in your pockets, let them serve a purpose for your saving goals. Whenever you get change, make a point of putting the coins into a jar and draw a line on the jar. Once the collection of coins reaches this line, count up the coins and dump them into your savings account.
You may only do that once – possibly twice – each year, but you’d be surprised by how quickly all of the coins can add up to something large.
Try To Lean In One Area Of Spending
We’ve hinted at this a little bit already, but it’s worth spelling it out: if you want to generate larger savings, prioritize a few – or even one – key areas. If you try to spread your saving attitude to every aspect of your life, you’ll be spreading yourself too thin and can even feel deprived of certain things that give you joy.
The goal of saving isn’t to deprive you of essential things or things you love entirely.
Instead of going with that approach, you want to focus on spending less in particular areas. How you can start all of that is simple. First, look for the easiest switches you can make. For example, cut out redundant spending. If you’ve joined a sports team, chances are you can cut your gym membership. Or if your gym offers a pool service, consider getting a pool pass at a recreation center. It may be cheaper to go there, rather than spending extra for pool access at your gym.
From there, you can also consider looking at areas where you can find it easier to spend less. For example, if you know that every week you go out for brunch with your friends, you could cut your grocery bill back a bit by planning meals for only six days, rather than seven.
That way, you’re not skipping out on something valuable and you’re cutting back on something that makes more sense.
Track Financial Progress
Dedicate some time every single month to see how much progress you are making on your money goals – whatever that goal may be. How much debt have you paid off? How close are you to saving for your next payment for the rent? How much money have you saved for that week-long vacation?
Whatever the goal is, make a note of it and consider what is working for you and what isn’t. If you feel you’re not making as much progress as you want, ask yourself what else you can do differently to make it better.
Muddle it over for a little bit and you’ll figure out your answer soon enough.
Beyond that, get into the mindset that any progress is still progress and the results that you are making are reason enough to feel more motivated.
This in turn can help you in improving your saving habits as well.
It’s All About The Small Changes!
While you may not see it right now, all of these small changes in your life can add up in big ways for you over time. Even if you’re saving as little as a few hundred dollars every month, that adds up every single year.