Most of us wish we had a little extra money in the bank. It’s not often people complain about having too much money. However, short of winning the lottery or receiving a large inheritance, the only way to have more money is by saving it along the way.
Easier said than done.
Although saving money can be difficult, once you make it a habit, you will be glad you did. Here are four strategies to help you save money.
Split Your Paycheck
If you receive your paycheck via direct deposit, you should be able to split your paycheck into more than one bank account. Ask your employer if this is possible (most payroll companies offer this feature) and submit the proper paperwork to make this happen. If you split your paycheck so that 90% of it goes into your checking account and 10% of it goes into your savings account, then you don’t have to do anything to save money. You don’t have to transfer the money yourself or worry about whether you have enough money to transfer. You never see it, so it accumulates without you having to do anything.
Automatic Transfer
Along those same lines, you can also set up automatic transfers on your account. If you know you always get paid on the 1st of the month, you can set a recurring transfer to occur on the 2nd of the month. This will accomplish the same outcome as splitting your paycheck into different accounts. By making it automatic and regular, you just need to set it up once to start saving money.
Save Extra Money
Another strategy for saving money is to live off your salary and save the rest. That means if you get a bonus, you save it. If you sell something, you save the proceeds. If you receive money of any kind other than your normal salary, you take it and put it into savings. If you can properly budget based on your regular income, then this is a great way to ensure the extra money you receive doesn’t go to waste.
Binge-Save
Sometimes, it helps to get you in the habit of saving if you go all out for a short amount of time. By focusing on it, you can understand where you can cut back and how to save more. It will also help you get a kick-start on your savings account.
For example, take 30 days and purposefully spend as little money as possible. Don’t eat out, don’t go shopping and don’t travel anywhere. Push off purchasing anything for 30 days (within reason). In the meantime, start saving money. If you normally go out to dinner and a movie on the weekend, don’t go and instead put that money in your savings account. Whatever you choose not to do that costs money, take the money you would have normally spent and put it away. This will give your savings account a nice boost and give you the motivation you need to keep saving money.
Saving money, even just a little, can add up over time. The key is to make it a habit and take the decision-making process out of it as much as possible. If saving money becomes automated, then you no longer have to make the decision to save.
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