Even if you are incredibly disciplined, frugal, and budget-conscious, it is still hard to reach a big savings goal. Long-term goals can quickly be taken over by a short term gratification.
Whether the goal is a down payment on a new condo or just paying off credit card debt to boost your credit score, reaching any dollar amount requires more than setting a numerical goal and establishing a timeline. It requires a careful look at spending habits that can slip under the radar, undetected.
Look carefully at those habits that seem harmless in the moment but can really undercut your savings habit when tallied up together. Use these five tips to reduce your spending habits and give your savings goals a little positive reinforcement.
1. Change your routine
Do you meet friends at Starbucks a few times a week? Replace those meetings with a pleasant stroll or an at-home kaffeeklatsch. (Take turns hosting) Do you and your spouse give in to the “early bird special” too often? Instead, look for new recipes and prepare them together. You don’t have to give up good times—you just have to re-imagine them.
Before you nix the daily deli stops or cut back on lattes, be sure to replace your old routine with something new. If you deprive yourself of your favorite sandwich shop, you’ll need to replace that old routine with a new one to counteract that habit. This might mean establishing a time over the weekend or every morning to hit the grocery store and fix an easy lunch or dinner ahead of time, or making sure your favorite coffee is ground and ready for your home coffee maker. You may find that you enjoy your homemade sandwiches better than the ones from the deli next door! Change your routine, and mindless spending can be curbed in the process.
2. Notice your spending triggers
When you head to a big-box store armed with a list of needs, it’s easy to walk out with a dozen other impulse purchases in your cart -- because you know you save money at those stores. Look at all the money you are saving - so there is room to add afew treats to your cart! You’re not necessarily off the hook if you avoid those big-box stores either: maybe you’re a little overzealous with online shopping or stocking up on food from specialty (read: expensive) grocery stores.
Maybe your spending trends aren’t location-based but emotion-based instead. A bad day at the office leads to going out for drinks and dinner. You deserve it after a miserable day - right? Maybe you are lonely sitting at home so you make a trip to the mall. We all know that hunger can influence spending habits. You buy more food items if you are hungry when you go to the grocery store. But did you know that hungry subjects spend on average, 60% more even on nonfood items than their full-tummy counterparts.
Try keeping a spending diary to help pinpoint your spending triggers; it will allow you to anticipate these cravings and find more affordable (and healthier) ways to overcome them.
3. Beat Your Budget Busters
While fixed expenses — like a mortgage or car payments — probably consume most of your budget, variable expenses can be a huge drain as well - and you may not even see them. Here are three common ones to consider.
- Subscription services: From monthly sample boxes to cable add-ons and everything in between, it’s possible that hundreds of dollars a month disappear from your account in small increments. Find the ones you can give up and see if things like your cable and internet can be slimmed down. Once you decide exactly which services you absolutely need, comparison-shop and see if switching providers could save you money.
- Fees: If you frequent out-of-network ATMs, you could shell out more than $4 per transaction after paying the managing bank’s fees as well as your bank’s fee. Throw in things like checking and overdraft fees, and you could be throwing away more than you realize. Look carefully at where your financial accounts are sitting and find a better, low, or no-fee option.
- Energy usage: Think your energy bill is too high? Try these tricks: Use a power strip with electronics to stop the use of phantom power when they aren’t being used, get a programmable thermostat and use it, and reset your water heater to 120 degrees to lessen the energy used to heat the tank.
4. Go digital
If saving isn't natural for you, there are plenty of apps to make the process more automatic. Pulling out your phone and checking your bank account may be the extra incentive you need to stop an impulse purchase. Otherwise, check out these apps!
- Digit: Digit can monitor your spending habits and make small, weekly transfers of money into your savings account when it won’t impact your checking account in a noticeable way.
- Acorns: After rounding up your purchases to the next dollar, Acorns will take your spare change and invest it for you in a diversified portfolio of stocks and bonds.
- Simple: Simple is a bank and a spending app. With your input and the debit card it comes with, the system can keep track of what is “safe to spend” after taking your bills and savings goals into consideration.
5. Symbolize Your Savings
Suppose you plan to buy a home in 2017. Transfer $20.17 cents into savings every week. If you are planning a big vacation in June 2017, set aside $23 (six plus 17) every month/week to help defray the cost.
By taking care of the physical and mental stumbling blocks that make you spend, you can clear your path to the experiences and lifestyle you crave.
Believe You Can!
No matter what tricks you use or how much money you can dig up, you won’t hit a savings goal if you don’t believe you can do it.
Comments(6)