If you want to achieve financial freedom, one skill is especially important: saving. Investing and higher incomes help, but if you’re not regularly putting money away for your future, or are living beyond your means, it won’t benefit you in the long run.
Getting in the habit of saving will not only help you in the future, but it will also provide security right now. Studies have shown money to be the leading cause of worry among Americans, with 44% concerned about their finances. These worries go away when you have some savings put away. You won’t have to worry about a job loss or other unexpected emergency so much, because if things do go wrong, you’ll know you have the means to handle it. To kick off National Preparedness Month, we wanted to share some of our top tips to help you save:
Make savings a part of your budget
If you want to save, it has to be a priority. You can’t make it an afterthought and expect to accumulate any significant amount of money. Pay your savings account like you’d pay any other bill, setting aside a portion of income each month. Over time, you’ll amass quite a bit of money.
Save in unexpected places
When you receive something unexpected—a tax refund, a work bonus, or winnings of some kind—resist the urge to splurge or go on a shopping spree. This isn’t just free money. It’s part of your income, and you should treat it as such. Put away some of it, or all of it, into a savings account.
Another idea is saving your loose change. Keep a jar in your kitchen and put in any extra nickels, dimes, and quarters you happen to find at the bottom of pockets or under seats in the car. You’re not going to get rich off of your change, but you could easily end up with a few hundred by the end of the year by saving it.
Think in terms of time
Figure out your hourly wages, and then put each purchase into hours. If a new pair of shoes costs $75, and you make $15 an hour, are those shoes worth the five hours it took you to earn that? This method also helps you decide what you value since it’s now your time at stake, not paper money or a debit card that can be hard to grasp the true worth of.
Also consider the investment value of money. When you set money aside in a high-yield savings or money market account, that dollar will grow over time. You’ll be a lot better off when your perspective is long term.
Goals give you something to look forward to and a way to track your progress. It’s much more satisfying to know you are on your way than wondering how much further you need to go. Goals provide a reason for your saving: maybe you are working towards a child’s education, your retirement, or a down payment on a house. No matter what it is, having something in sight will keep you motivated.
Just remember to keep your goals realistic and measurable. Don’t set your sights so high you get discouraged and don’t do something you have no way of tracking. If you want to start small, set a short-term goal for something you’ve had your eye on, like an electronics upgrade or some new clothes. Feeling your efforts pay off will make you more likely to continue saving since you’ll have an experience of success under your belt and can be more disciplined in spending less.
Check yourself regularly
Getting in the habit of saving is great, but over time, small changes can cause us to veer off track and away from our goals. If you overspend a few times a month, that will impact your savings overall. You should be monitoring your bank accounts on at least a weekly basis.
It’s also helpful to sit down and do a complete assessment of your finances every month or so. When you wait and look back over a longer period, you’ll see patterns and habits start to emerge. From there, you can see what you’re overspending on and what you can change for the better.
Keeping on top of your finances will help you better meet the goals you’ve set and will prevent you from getting too distracted.
Start saving today!
Denali has many great options for people looking to open a savings account. From the basic savings account to high-yield money markets and long-term certificates, there’s something suited for every need.