When you think about your savings "end" goal—whether it's an emergency fund, a down payment on a house, a bestie's bachelorette party in Miami—the task can seem daunting, to say the least.
But, the willingness to start and stay committed to saving what may seem at first to be an endless series of trivial dollar amounts is what will ultimately determine your success.
Financial advisor Ric Edelman offers some food for thought on the subject:
“Don’t blame your income for the fact that you’re not saving money. Making more money has nothing to do with it. You earn more than you did ten years ago – back then, you longed for the money you’re complaining about today! It’s a common occurrence: A study by the National Bureau of Economic Research shows that high-income households have just as much trouble saving money as low-income households; both groups save pretty much the same amount.”
Well said, Ric. Well said.
So, dear readers of The Dime, whether you're finally ready to hit "start" on saving, or you're looking to switch up your current saving game, here are some easy ways do it without completely changing your lifestyle in the process.
Charge yourself interest:
If you have to pull from your savings, consider it a loan to yourself—which means interest will be tacked on. It's a win-win situation: you'll be discouraged from touching your savings in the first place, and when/if you do, you'll end up increasing the total balance.
Round up your purchases:
Several banks have programs that round up your debit or credit card purchases to the nearest dollar amount, and then deposit that change into a savings account. This is a virtually painless way to save every time you spend—no excuses.
Utilize debt repayments:
If you’ve successfully paid down your debts, continue to set aside the same monthly amount, but this time, put it toward your savings. Chances are you’ve already become accustomed to seeing that money leave every month (sad horn), so you might as well keep the momentum going.
Make it automatic:
For most of us, money in our checking account is fair game when it comes to spending—even if the purchase isn’t necessary. Stop the temptation by having a portion of your paycheck automatically deposited into your savings account each month. Set the amount at what you'd normally have left over after paying bills and buying monthly necessities, and you won’t even have to make any significant lifestyle changes.
Make some days more frugal than others:
Making lasting change doesn’t mean doing a total overhaul and then kicking yourself when you revert to old habits. So, instead of completely cutting out anything, well, fun, determine first how much you can cut back (like going from five grande iced caramel macchiatos per week to three), and then plan to save the difference (this nifty tool can help calculate your potential savings).
Do you have any tips for easy ways to increase your savings? Share them with us.