If you haven’t yet put together a saving plan, or if you feel like you’re behind on your goals, you’re not alone. In fact, 63% of people in the US don’t have enough saved up to cover a $500 emergency. Times are tight for many of us and it can feel impossible to put money aside, but even small contributions to savings will add up quickly and make a big difference down the line. These tips and tricks can help you become a better saver:
1. Don’t Put Off Starting Now
It might be tempting to think that you should wait until you come into more money to establish a savings plan, but that’s a mistake. Starting now, even if your contributions are small, can help you commit to a regular plan and develop a habit. Getting started is often the hardest part – make a commitment to putting a certain amount away every single month. Even if it’s just a couple of dollars, starting the habit now will serve you well. And even a couple of dollars at a time will add up after a few months.
2. Set Specific Goals
It’s always a good idea to have an emergency savings account for those sudden car repairs or medical issues that can otherwise cause a financial setback. Choosing a specific financial goal can help give you the motivation you need to put that money away. It may be that you want to reach $1,000 or that you want to buy a specific big-ticket item – give yourself a target to hit. Then, write that target down or find a picture of it and put it up somewhere you’ll see it all the time. That reminder will help you stay committed to reaching your goals. It can also help to create a visual measurement of how much you’ve put away so you can see that you’re making real progress – maybe put a marker on your target every time you put away $100.
3. Begin At The Beginning
Once you feel determined to start saving, it’s tempting to set out a whole array of goals. But that can quickly get overwhelming and you may run out of motivation if you can’t meet them. Instead, start small and work your way up. Develop one savings goal at a time and then celebrate when you reach it. Then set a larger goal and start working toward that.
4. Use Different Accounts for Each Savings Goal
As mentioned above, an emergency fund is a worthy savings account all on its own. However, you might want to set up different accounts for your other goals, too, including vacation, educational needs, or your car. This way you can easily chart your progress and work towards those goals one at a time. It will also make you think twice about pulling money from the car fund to cover vacation expenses – separate accounts can help remind you of why saving is important in the first place.
5. Ask Your Employer About Immediate Savings Options
Some employers offer programs in which a certain portion or dollar amount of your paycheck can be diverted immediately to savings. This is most often done with retirement savings accounts, but you can also set up your own recurring savings transfer. That way the temptation to put off saving for another week isn’t an issue – it happens automatically.
6. Channel Your Other Payments Into Savings
Recently paid off your car? A credit card bill? Your car? Rather than absorbing those funds back into your regular spending, continue to write the check – but this time take that same amount of money and divert it to your savings accounts. Doing this for six months or a year could make a big impact. You’re already used to not having that money and it’s going to add up really fast.
This tactic is also great for paying off debts in general – pay off one credit card and then just keep making the same payment toward the next debt.
7. Technology Can Help
Gone are the days of budgeting on paper – there are a number of great apps out there that can make saving easier than ever. Digit, for example, tracks your spending and automatically pulls money into your savings account based on what you can afford. Mint is another popular tool that helps you track your budget in clear, simple terms; it also offers other features like automatic bill payment. It’s also a lot easier to stick to your financial plan when you have access to all of that information right at your fingertips all day long – you can handle your savings while you wait for a cup of coffee to brew!
A Penny Saved
Long story short, becoming a better saver is all about making saving a habit. Stick to your guns and find methods that will help you keep up with your saving goals. And it’s never too early to start – a penny saved really is a penny earned and those pennies will add up over time. Good habits now can lead you to a lifetime of financial security.