It’s no secret that saving can be difficult. There are so many factors involved, such as our spending habits, interest rates, income, bills, budgeting, and more. While many people are quick to give up on reaching their peak saving potential in place of just getting by, making use of a few interesting concepts could take your saving skills from zero to hero.
Saving isn’t always about making more money; it’s mainly about what you do with the money that you have—as well as what you’re willing to change in your life to reach your goals.
Here are 8 facts about saving money that may just keep you up tonight, thinking about what else you could be doing to reach those goals:
We consume media like sponges, and most of us don’t even realize the habits—both good and bad—that we’ve picked up along the way from television.
The truth of the matter is that commercials are geared to make us want to buy things, so, your TV habits could effectively cost you a chunk of your savings.
If your idea of relaxing after a hard day at the office is to watch some TV, it might be a good idea to press mute during the commercials, or get up and go do something else for those 2 to 5 minutes.
Don’t get sucked into the sales that end at midnight or the markdowns you’ve been dying for.
Many advertisements make you feel like you’re somehow losing out by not partaking in a sale, but without that sale, you wouldn’t be spending your money at all.
It’s all a vicious cycle of guilt and FOMO-driven consumer culture.
You could be saving yourself time, effort, and money by steering clear of too much television and those pesky ads.
Those who plan are more likely to succeed. This is already a well-known fact in most other areas of life, and the same goes for savings.
If you’ve been trying to save for months or years and can’t quite figure out why you’re failing to reach your goals, the chances are that you’ve planned it out poorly—or that you have no plan at all.
Within your planning, you should lay out a budget but also rules to hold yourself accountable.
Try to set up your bank accounts to accommodate your plan; you can opt for a savings account, where once the money goes in, you can’t touch it.
Set up an emergency fund instead, to give you the option of extra money if you need it.
According to Bankrate’s latest Financial Security Index, nearly 28% of U.S. adults don’t have any emergency savings.
Some put money away for a rainy day, but not enough to cover even 3 months of living.
Having an emergency fund might seem like money wasted at first, but if the worst is to happen, then you can use the emergency money while keeping your savings safe.
Most people have no idea about the full potential of their work benefits.
After getting hired and signing that contract, many forget the finer details and perks of their paid position.
Whether it’s paid leave, the correct number of hours to work, or benefits such as superannuation and the potential for a pay increase over time, many people neglect to understand all that they’re entitled to.
Many of us are also too afraid to ask.
This fear could ultimately result in you losing out on gaining or saving money.
If you feel that you’re living paycheck to paycheck, as 31% of Americans say they do, look back over your contract or speak to someone in human resources to figure out whether there’s anything extra that you might be entitled to.
Perhaps it’s simply requesting to be paid weekly instead of fortnightly, or the ability to request an increase in pay due to years worked. Regardless, you’ll never know unless you check.
Slow and steady
One of the best ways to save money is by having the same amount of income coming into your account every week/fortnight.
That steady figure is comforting, easy to plan around, and gives you an even base to work off.
If your hours vary, and your income is not salary-based, this could affect your ability to successfully save.
If your circumstances don’t allow for this, then a good idea might be to organize your finances on the days when you get paid.
Establish a base number, from the median amount you receive weekly/fortnightly. For example, if you get paid between USD$500 and USD$700 a week, your base number for savings should be under USD$500, as it’s the minimum that you’ll get paid.
Setting it too far above this figure could mean that you lose out on weeks where you’re paid less, and could put your financing out of balance for a while.
The savings account that you choose could help to save you money.
There are high-interest savings accounts out there that reward you handsomely for your saving efforts.
While interest rates might feel so small when it comes to your savings, if you play it smart and are disciplined with your budget, the returns could just add up over time.
Some institutions only offer these accounts to customers who sign up for things such as health plans or use other bank products, but it’s still worth looking into.
Surprise! Unnecessary shopping could be hindering your savings. This certainly won’t be a shock to most of you, but it all comes down to the level of savings you want to accomplish.
If you’re saving up a few hundred for a purchase, then it’s probably not going to be too difficult.
Even if you’re simply playing the long game, adding quietly as you go, you may be able to afford slight indulgence every once and a while. If, however, you’re saving up for a wedding, to buy a car, or to eventually pay off a loan, then you’ll need to be somewhat stricter.
People shop when they’re stressed—that happens.
The problem is that when people don’t have the money to be spending, this can make them feel even more stressed, and even more inclined to blow off steam at the mall.
Unfortunately, to reach major savings goals, the number one thing that you need to do is cut back on expenditures.
With household spending already sitting anywhere between USD$61,224 annually or USD$5,102 monthly, many people can’t afford anything but the necessities.
The amount that you need to live on must come before any non-essential shopping.
Learn from mistakes
We all slip up, of course. The most important thing is what we do next—how we choose to learn from our mistakes.
If you know from experience that you tend to dip into your savings for impulse buying, then you need to put things in place to stop this from occurring in the future.
You can also learn from when you’ve done something right; the amount of savings in the U.S. nearly doubled from 2019 to 2020, primarily because of the pandemic.
More people stayed home and ate in, saved on gas money, and decided not to go on holiday.
All of this led to Americans collectively saving over USD$2.3 trillion in personal funds.
If you did things differently in 2020, take note of what it was, and how much money you saved because of that change.
You might find exactly what you need in actions you’ve already taken.
Pay yourself first
This can sometimes be a tricky one, and many people struggle to wrap their heads around the concept.
It is very important that when your paycheck comes into your account, the first thing that you should do is put your set amount into your savings.
If you don’t take care of yourself, then you’re not going to be able to take care of anything else.
Bills need to be paid, and groceries need to be bought, but if you take that paycheck and spend it right away—even on necessities—where does that leave you?
Make sure to divide some of your income into your savings and that emergency/spending fund.
If you plan and budget correctly and within reason, you’ll be surprised by the results.
What to take away
While it’s important not to place too much pressure on yourself when it comes to savings, there’s still a level of discipline that you need to maintain to reach your goals.
You may need to give up some things that you don’t want to give up; you may need to look into work benefits that you’re entitled to, but aren’t getting; you may need to speak to your bank about saving account options.
These are the facts, and if you want to become the queen or king of your savings, then you should learn them well.