6 Ways to Stay Focused on Saving
Saving money is hard. It requires responsibility, and there are always distractions along the way. Like when you’re saving for a down payment on a house and oh, hey! Look! You’ve just amassed enough to buy a Wii! Below are six ways to keep your eye on the prize. Or keep it off the prize until you can afford it, anyway.
6. Invest in a retirement fund. Just make sure it’s one that penalizes you for withdrawing early.
5. Make visual reminders. What are you saving for? Retirement? A house? College for your kids? Find a picture that reminds you of this goal and keep it where you can see it.
4. Two savings accounts. Use one savings account for short-term goals and one for long-term goals. This separates your money and reminds you to keep your grubby hands off of the important stash. I have two savings accounts at different banks. The one with the higher interest rate is for my nest egg. The one with the lower interest rate is for big purchases, although it’s looking like it might go toward a vacation with the boyfriend at the moment. But that’s okay - that’s what the smaller savings account is for.
3. Tell a friend. Tell someone close to you that you want to put away some money but need help with the discipline of it. If your friend is willing, have regular meetings over coffee or a drink to check your progress. Remember: if you feel like you have to lie to save face, you’re not making any progress.
2. Keep a budget and allow yourself some room. If you can afford to, allot some space in your budget for the more fun purchases. If you deny yourself all non-essential spending, it makes saving a bigger challenge than it has to be, and it puts you at risk of saying “Screw it all!” and blowing the whole operation. A lot of diets include the occasional nibble of chocolate for the same reason. Just make sure you stick to the budget.
1. Set it and forget it. If your bank allows you to make automatic transfers from one account to another, take advantage. Set up an affordable amount to be transferred from your checking account to your savings account every pay period. If you’re paid through direct deposit, you can probably arrange for a certain amount of your check to be deposited into your savings. Then forget the money was ever there. Don’t even include the transfers in your budget - the money being transferred doesn’t exist, remember?
So, there you go. Six easy-as-pie ways to stick to saving. Anyone can do it.
Tags: automatic transfer, budget, budgeting, direct deposit, invest, retirement fund, saving, saving money, visual reminders