We all know the importance of saving. Allocating a portion of our salary diligently helps us prepare not only for the future but also in emergencies where we need money the most.
Despite this knowledge, the reality is most people have difficulty saving. No matter how big or small your salary is, it just seems insufficient to pay off all your bills and save some money. How can you embed the habit of saving in your life? Here are some ways to motivate yourself to save diligently.
Automate Your Savings
Most of the time, we’re torn between saving money or spending it on something we need or want. To save you the hassle of this dilemma, you can automate your savings before even receiving your salary.
You can ask your boss or authorize the bank to allocate a portion of your salary (at your own discretion) and have it transferred to your savings account before you receive your salary. In this way, you can make sure you’re saving every month and overpower your will in the process.
Hide Your Savings
Now that you’re sure to set aside a portion of your money to save, the next step is to not think about it constantly. According to the experts, you’ll be tempted to spend it if you know you have extra money. To overcome this hurdle, the financial advisers recommend you set up a separate savings account and hide it from your view.
This way, you won’t be tempted to think you still have extra money when you view your checking account since your savings are in a separate account. Put it in a passbook if you must. The more difficult it is for you to withdraw your savings, the less you’ll think of this money. Aside from that, they recommend limiting your checking on your retirement funds to twice a year.
Label Your Savings Purposes
Most banks allow multiple sub-accounts under your main savings account and let you label it according to your goals. For example, you can label your savings account for vacation, new house or car, insurance, retirement, travel, etc. According to financial advisers, labeling your savings motivate you to save more so that you’ll be a step closer to accomplishing your dreams.
Track Your Finances Through Apps
Aside from developing a saving habit, you also need to check and monitor your spending habits. Try downloading some financial and budgeting apps like Acorns, Digits, and Keep the Change to help you monitor your cash flow.
You’ll also determine where most of your money is spent, and you can cut back some unnecessary costs to increase your savings. In this way, you’ll have tighter monitoring of your money which will help you to not spend it impulsively and recklessly.
Lock It Up
While restricting your access to money is vital for you to save more money, you should also set aside easy and accessible money for your emergency funds. This includes money for renovation, in case you lost your job, as well as other unexpected expenses.
Other than that, the experts recommend you lock up your accounts so that you won’t be tempted to withdraw it. Some examples of lockups include time deposits, investments, and retirement funds. The penalty associated with early withdrawals discourages you from spending your money unless necessary.
Save Your Rewards.
Most people dread availing of credit cards in fear they’ll end up being drowned in debt. If you feel like you can’t control yourself while having a credit card, then the financial experts recommend not availing of one.
But if you’re in control of your spending habits, then they recommend availing of one. Why? It’s because you can actually save more money in the process. Most credit card lenders offer cash-back rewards to those who pay diligently.
Not only will you be free from paying the interest and late penalties, but you can also transfer your cash-back rewards to your savings account.