It’s not weird to wake up one day to the realization that your spending habits are not the healthiest. If this recently happened to you, then you’re not alone. Most people come to this realization at least once in their lives. The important thing is acknowledging and changing this way of life; you can develop better spending habits by adopting a lifestyle that encourages saving more than spending, and better yet, growing your savings in the process. To help you get started, here are five helpful tips to get you on the right path to saving and growing those personal savings.
Define your saving goals
So you’ve decided to grow your personal savings, and that’s great. However, one thing that can really motivate you to save more is by clearly defining your goals for saving. What is the motivation behind growing your savings account? Are you saving for a new car? A down payment on a new apartment? An investment in a business? Whatever it is, you need to clearly define it so that you know why you’re taking the steps to increase your savings.
This tip is particularly important because you might find that a couple of months into saving, you begin to lack the motivation to save more than you spend. Spelling out your goals can give you something to hinge on for those times when you need a new dose of encouragement.
Clearly outline your needs and wants
Another handy tip is to outline what your needs and wants are. This is helpful because you begin to see that some of the regular purchases you make aren’t even necessary at all. Think about it, you don’t need to spend money every day buying a cup of coffee from Starbucks, but you still do it because it feels right.
To grow your savings, you need to save more than you spend, as such, you need to let go of any purchases that are not absolutely essential. Your bills, mortgage, transportation, and groceries are needs. A new flat-screen TV and expensive shopping spree are not. That doesn’t mean you can’t treat yourself to nice things once in the while. The point of this is to be more mindful of what you spend on and how you spend.
Create a spending budget
Put together a list of your income and your expenses and come up with a spending budget. Your budget should cover your essential expenses as mentioned above. You can decide to draft up a weekly budget or a monthly one, but do not forget to make provisions for your much larger annual expenses. Your budget should also be realistic. It’s important not to go overboard when drawing up your spending plan by limiting yourself to the extreme. In fact, it’s actually advised to leave room in your budget for an occasional treat so that you do not get discouraged.
Set up another account
Creating another account can also help you with your savings journey. This account can act as a business account, and in this case, you are the business. Think of it like this, with this separate account, you can treat yourself as someone that you owe money to; essentially another bill on your expense list.
Any money you put into this account can further be put into profitable investments. You can choose to invest in low-risk businesses or markets, or you can choose to invest in high risk but high yielding businesses, the choice is yours. The point is for you to set this money aside for the purpose of growing it. Make sure you allocate this ‘business account’ as a bill in your budget.
Make use of discounts and coupons
You can take advantage of grocery store coupons and discounts when you’re shopping. This doesn’t necessarily mean that you should turn into a coupon hoarder. However, you can cut your costs significantly in the long run, by using a coupon and some discounts here and there.
The great thing is that this doesn’t just apply to grocery stores. If you qualify for a discount a restaurant or at a clothing store, don’t hesitate to use it! No matter how little the saving is, it’s still a save and will contribute towards your goal of growing your personal savings.