It can be a challenge to save money, there’s no doubt about that. With anything that you want to achieve gaining knowledge and practical advice will improve your odds of success.
The same is true of reaching your savings goals. These seven tips can help you reach and keep your savings goals.
1. Have a Goal
Before you can reach a goal, you have to have a clear and defined vision of what that goal looks like.
For savings, usually, that goal is a certain number. But there’s always a why behind the number. What’s yours?
If you are saving up for retirement, you need to know how much you will need to retire at your desired age. Take into consideration all the factors, including inflation, of how you can retire comfortably.
Maybe you’re saving up for a down payment on a new home. Again, there will be a formula to find a ballpark number here.
What price range are you looking to pay for your home? What percentage down payment are you expecting to pay? Doing a little math is all you need to do to find the right goal in this situation.
2. Find the Right Method
Now that you have a clear goal in mind, your next step is to find a savings plan that will work for your personality and way of life.
There are a few different methodologies that people follow to save money consistently.
- Set a certain percentage of your income as your savings.
- Live by the 50/30/20 Rule (Physicians Thrive offers more on that here)
- Use the change from each purchase as savings.
- Save every $1, $5, or $10 bill you end up with.
- Automate a transfer to savings each month.
- Every time you spend money on yourself, meet that amount into savings.
- The 52 Week Savings Challenge
3. Find Ways to Cut Spending
One surefire way to make saving hard is to spend too much money. Then you won’t have any money left over at the end of the week to dedicate to savings.
Cutting your spending back will not only make it possible to save but also help you save even more. Be honest with yourself and look for any unnecessary expenses that you could get rid of.
Just like savings methods, there are budgeting methods to help you cut back on your spending habits.
- Use a budgeting app that tracks your spending and sends alerts.
- Use the envelope method, putting enough money in each method to pay towards certain necessities.
- Follow the 24-hour method. Take a day to think about a purchase before going through with it.
- Only take a certain amount of cash out each week that you can use for spending. When the cash runs out, you can’t spend any more until next week.
4. Meet with a Professional
If you admit to needing some help in reaching your savings goals, there is no shame in going to a team of financial specialists to help you.
Many professionals work with financial planning experts to help them wade through the complex financial situations that they encounter and this helps them to stay on track with their savings goals.
You can get help too. Even if it requires a little investment up front, a good financial advisor will save you more money than they expect as compensation.
5. Find Ways to Downsize
If your savings goals are important to you, you must be willing to make some sacrifices to reach them. This means that you should be willing to give up some of the luxuries you have now that take up a big chunk of money.
These could be different for each individual but some of the most common is a glitzy apartment or house that is bigger than necessary, a car that has all the bells and whistles, the newest gadgets, and name brand clothing.
While all these things are nice, they can easily suck your wallet dry. If you can find ways to downsize your life, you’ll easily have extra money to put into savings and reach your goals faster than you thought possible.
6. Learn to Be a Penny Pincher
Along with making sacrifices on your big purchases, you can save a lot of money simply by making small changes in how you purchase your daily needs.
Coupons are easier now since most have gone digital. You can also shop at discount stores, buy in bulk, and pack your lunch instead of eating out.
Try refinancing your car loan for a smaller payment, shop around for a better insurance plan, and take advantage of any discounts you can get.
7. Check In Regularly
Any habit can begin to weaken as time goes on and unexpected things can pop up without warning. Also, our circumstances can change for the better or the worse.
Regularly checking on your savings and financial situation can help you stay up to date on what needs to change and what is working.
It can also give you a boost of motivation when you see how much progress you’ve made. This will help to keep you moving forward and keep saving money!
Saving money doesn’t have to be such a big mountain that you dread the climb. Instead, prepare to scale that mountain with knowledge, determination, and a few quick tips from this helpful article.
Be sure to celebrate every little win and don’t allow temporary setbacks to become permanent roadblocks. You’ll reach your savings goals if you stick to the plan.
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