Do you find yourself living paycheck to paycheck? Do you put money into savings only to pull it out over the next few weeks? The ability to save money for the long haul is not as common as you’d think. Most young people wish they can save more money, but don’t know how. The CGS Team has put together a guide to help you become a savvy saver.
A savvy saver is someone who can put money away consistently and live within their means, without touching that savings. Of course emergencies happen, but if you have a savings account with money in it, you won’t need to resort to using credit cards. Get ready to learn what it takes to become a savvy, saving lady!
How to become a savvy saver
Change Your Mindset
First and foremost, if you want to be a saver, you need to change your mindset. Instead of thinking “I want to shop for the best deal”, start thinking “I don’t need to buy this at all”. Since saving takes discipline, your actions will show if you really want it. Make the decision to become a saver instead of a spender, then stick to that decision. When you do want to buy something, save for it before splurging. Check out CGS Podcast Episode #18 – 5 Mindset Shifts to Change Your Money and Life.
Don’t Be Afraid to Start Small
Even if you can only afford to save $25 a month, save it anyways. It will grow over time. The act of saving doesn’t require you to save large amounts of money to be successful. Just being able to save a set amount each month and not touch it will make you a savvy saver, regardless of the amount saved. Start small to get yourself into the habit of saving, and don’t think that saving a small amount is a waste of time.
Have Money Taken Out of Your Check
Every woman needs to contribute to a 401k. You may think that you can’t afford to have 2% taken out of each check, but you will be surprised to see that you actually can. Having the money taken out of your check before it’s deposited makes it easier not to miss the money. If you think of it as a deduction, then you wouldn’t have budgeted for it anyways. A savvy saver saves for retirement; no questions asked.
Create a Budget, then a Plan
A savvy saver knows exactly how much they can afford to save because they have a budget. A budget tells you what’s coming in, what’s going out and what’s left over. That left over amount gives you an idea of how much you should be saving. If you notice that you should have $500 left over each month but you are only saving $100, you need to ask yourself where that remaining $400 is going.
It’s possible that you didn’t budget for excess spending (refer to Change Your Mindset). Create a plan for the money that you want to save. What are you saving it for? How much are you saving for each goal? How consistently are you putting money away? Your savings plan should address all of these questions.
Set Up an Account for Each Savings Goal and Automate
One of the best ways to save consistently is by automating when and how much you save. Refer back to your savings plan to see how many different goals you are saving for. Open a new bank account for each goal and automate savings into each account.
Maybe one month you have $100 going into your “New Car” fund, then the next month you have $50 going into a “Shopping” fund and the remaining $50 going into a “Children’s College” fund. Automating takes the responsibility away from you, so all you have to do is watch your savings grow! Read 5 Ways to Make Saving Money a Habit for more details.
Get the Most Bang for Your Savings Buck
Consider opening a Money Market Savings account or a High Yield online savings account. These types of savings account offer much higher interest rates than common bank savings accounts. Also consider bank accounts at local credit unions. Credit unions usually don’t have monthly service fees or balance requirements like standard banks do. If you are going to save money, you want to get as much as you can for as little as possible.
Related: 6 Traits of Successful Savers
Becoming a savvy saver is not as hard as it sounds! Change your mindset and you will be amazed at how disciplined you become about saving! We would love to hear what money-saving tips you have. How do you stay consistent with your savings? Leave a comment below to share your tips with the CGS community!