More than 20% of adults aren’t saving anything from their annual income, which means if an emergency comes up there are no backup funds to cover it. This type of situation can lead to very detrimental circumstances and should be avoided if at all possible.
Everyone knows that saving money is a smart financial move but it’s often easier said than done for many families.
Saving up and managing your finances requires deliberate, intentional steps and care for your money. We’ve compiled a list of our top twelve tips to help you get started!
1. Keep a Diary
Before you can really learn how to save money, you need to figure out how you’re currently spending money. Keeping a diary of all of the incoming and outgoing money transfers will help you get a realistic picture of your financial situation.
Without this information, it’s hard to figure out the best way forward with the most effective strategies. Most people find a spending diary very insightful and surprising!
2. Create a Budget
After you see where your money is currently going, it’s a good idea to create a more solid plan to control that spending and keep it in check.
A budget is the best way to make sure you’re needs are covered and you have enough left over to add to your savings. Without a budget, most people spend more than they intended to and things can quickly get out of control.
3. Have a Dedicated Savings Account
Though it seems simple, a great way to save is to open a savings account. When you have this place set up, the money doesn’t seem as accessible and it’s more likely to go unspent.
Most banks have great savings account options that can help you keep that money safe until it’s time to use it.
4. Open Multiple Savings Accounts
Since a savings account is such a good thing, why stop at one? Many find that having more than one savings account with specific purposes helps them to meet their savings goals easier.
Things like saving for a home, medical expenses, or a dream vacation all get a specific location so the money doesn’t get accidentally used for something else. This is a great way to be extra intentional about your money and what it’s being used for.
5. Pay Off Debts
Possibly the biggest distraction from saving is debt payments. It’s hard to want to save money when you know your interest is adding up with every passing month.
That’s why it’s helpful to pay off your debts as quickly as possible. This frees up both the money you’re spending in payments and interest, as well as the mental worry debts can cause.
6. Set Realistic Goals
Setting savings goals is one great way to focus your attention on not spending all your money. But the goals need to be realistic or you won’t be able to stick to them.
The more specific you can be in detailing your goal, the more motivated you’ll feel to hit that dream number in the account. It’s easier to make sacrifices when the bigger dream is in sight.
7. Automate Bills and Deposits
No matter how much we all despise them, bills are always going to be a part of life and can’t be completely avoided. Automating bill payments is a great way to make sure everything gets paid and avoid not having enough in your account when they are due.
It’s also a great idea to automate savings deposits as well. That way you can’t decide to use that money on an impulse purchase instead.
8. Cut Out Unnecessary Expenses
As you’re taking detailed notes of your spending habits and setting up automated payments, you may come across things you’re spending money on that you didn’t even know you were. Or you’re spending more than you’d like.
There are a lot of simple ways to cut expenses that may add up to a significant amount every month you can put towards savings!
9. Keep Track of Totals
Sometimes we view savings as a set it and forget it situation, where that money is out of sight and out of mind so it doesn’t get spent.
But watching your savings totals each month can be a great motivation. It’s easy to see how just a few extra dollars add up and are moving you towards your end goal. That motivation is key to developing your financial freedom.
10. Bring in Additional Income
As you watch that savings total move upwards, it might not be moving as fast as you’d like. If that’s the case it might be a good idea to find a side hustle.
These additional jobs can be done in your leisure time and then all of the money earned can go towards your savings goal. It’ll take more work but the benefits to your savings account can be huge!
11. Develop Discipline
The most important thing anyone needs to reach any kind of savings goal is to have discipline. You have to put off what you want right now at the moment for what you’re hoping for in the future.
There’s no immediate gratification in saving and it can take a while to get used to that kind of mindset. But once you do, these financially smart choices become second nature.
12. Every Step Counts
In order to keep that motivation and discipline, it’s important to remember that every step counts no matter how small. No fortune was built in a day but penny by penny you’re moving towards your goals!
Don’t forget to celebrate your small wins and give yourself credit for the hard work saving money takes!
Tips for Successfully Saving Money
Saving money is the best way to build your wealth and open the way to your future dreams. Little by little you can develop a strong financial background with independence.
No matter where you’re starting point is, anyone can begin to develop the habits necessary to increase their savings accounts.
If you’re interested in learning more about smart money management tools and how to better your financial situation, check out our other articles today!
