How to Start Saving Money When You Never Have
If you think about it, we have all touched money at some point in our lives. Some more than others, some way less than others. Understanding the concept of how money works and how to save money should be easy peasy. The basic concept of money management would be simple : make money, save money and then spend money. We’re all well of, right. But here’s where many of us have not quite mastered the fundamentals. Knowing how money works is easy but it doesn’t equate to action. If so, I think we’d all be pretty rich already.
Allow me to show many of us grace when it comes to our relationship with money. Our financial habits are highly based off of influence and the people around us. Chances are you watched your family, friends, and celebrities spend frivolously. You may have also heard people around you say, “I work hard for my money. I have only one life to live and I’m going to enjoy my money while I’m here. Saving was never in a conversation about money. So, since it was never in the conversation, I’m sure no one ever showed you how exactly how to save. It’s easy to see how we end up being big spenders and totally clueless about saving money. Judging from the many financial books , websites, and casual conversations about money figuring out how to actually save is out of reach.
So today I’ll walk you through the four easy ways to start saving money if you aren’t a big saver already….
Setting Up a Separate Savings Account
I have always had a checking account and a savings account. I noticed I was transferring way too frequently from my savings into checking with ease right on my mobile app. Now that savings is so important to my financial goals, I opened an online savings account that takes me through loopholes to transfer. Here’s a suggestion, open an account either online or local, specifically for savings. If you open a local account, ask to NOT have an ATM card. It helps tremendously to not have access to your account. You will think twice about driving across the city and walking into the bank to transfer money. Creating this separation also has a great impact on your savings goal. You quickly become intentional in creating a “nuturing home” for my savings to live. Saving was now going to be prioritized.
Tracking Your Spending
You can’t find more money to save if you don’t know how you are spending. I realized I couldn’t figure out how much I could save unless I knew how I was already spending my money. I had the main expenses down like the four walls but not how much I was really spending on food and random stops at Target. These quick swipes add up. And, when you look back over your account, you realize dang I could have easily paid for that conference I wanted to attend with how much I’ve spent on fast food.
So I signed up for Mint and connected all my bank accounts to it. For a couple of months, I retired using cash and used my debit card for every single transaction so it gets automatically tracked. Then I spent like I normally would, letting Mint keep tabs for a couple months so I could get an average of how much I was spending per category.
Every one is different. What may work for me may not work for you. Here are some other options for keeping track of your spending.
An old-fashioned spreadsheet. You can setup a simple chart with pretty colors, charts, bars and graphs in Google Sheets.
A Budget. If you setup a budget and stick to it, I’m sure you will track your spending and find way more money to save.
Old School Check Register. I mean before there were apps and websites, a check register tracked every dollar and category of spending.
Save First then Spend
I know it seems impossible. You barely have enough money to pay bills or you think the money I put aside for savings could be used for something else. Listen if savings is a priority, you HAVE to save first, Before you pay your bills, before you buy groceries, before you do anything else, set aside a portion of your income to save. Put the money into your savings account. The first bill you pay each month should be to yourself. This habit, developed early, can help you build tremendous wealth. I suggest starting small 10% of your income. If that’s too much save 5% and when you’ve built saving endurance amp it up to 10%.
Set Savings Goals
Finally, I love to watch my money grow. Spending money doesn’t feel great, but savings does. Seeing results, even small ones, encourages me to keep going. Savings should not be viewed as restriction or a negative chore. Setting savings goals towards experiences or big dreams makes you feel amazing. I had to begin looking at savings as way to finally make many of my dreams come true. Buying a home, owning a passport, going on a trip, and having Christmas money were important for me. I found myself feeling so overwhelmed about all of the things I wanted to experience but not having the funds to do so.
So I signed up for Qapital. Qapital is a banking app with your goals in mind. Saving ‘just because’ is fine, but saving for something special is fun. I love Qapital because it helps you get meet your financial goals, no matter what they are, faster with Goals and Rules . Say you want to save for a passport or a trip to Africa– you can set up your goal amount and make rules for savings like round up or weekly deposits. You can even team up with others to reach joint goals. I found the joint goals pretty cool. My husband and I have a savings goal to take the kids on a 2 week vacation every year and we save jointly. We don’t even look at the account. It’s become automatic.