A saving hack
A hack for saving money
Introduction
Do you find it hard to save money? Are you finding that at the end of each month you do not know how much you have spent on bills and other expenses, much less know how much you have saved or invested?
A good habit
Saving is a good habit to develop. If you can figure out how to feel good about doing it, then you are more likely to keep at it and not feel deprived.
Why is saving important?
Saving is important because you can not predict the future. If you could then you would know exactly how much money you will need and when.
Research has shown that money issues are the # 1 cause of stress. (Jeanette Mulvey "Work, money leading cause of Americans' stress." Fox News. 02/03/2012. 24/06/2014)
Stress can lead to issues such as depression, heart disease, and a host of other illnesses ("50 common signs and symptoms of stress." The American Institute of Stress. 24/06/2014.)
A saving hack
A hack to saving money is to pay yourself.
Everybody else gets a cut out of your earners - the taxman, the utility bills, etc - so why not you? You work hard so you deserve it. Saving from a non-judgmental place allows you to feel good about yourself.
I know what you are saying. You are saying that there is no way this can work! At first, I thought so as well. Here is how I did it.
A practical approach
Open an account that is not easily accessible at a financial institution. Call this account the "Me Account".
- I opened my account at a credit union.
- I did not take out a bank card for this account, which meant no ATM transactions for me.
- If I wanted money from this account, I would have to drive to the credit union and wait in a queue.
- I hate queues, so this was a deterrent for me from withdrawing money from my Me Account.
Whether you earn weekly, fortnightly, monthly, or infrequently, set aside an amount for your Me Account every single time that you get paid.
- When I just started out, owing to my lack of discipline and consistency, I had to set up a recurring deduction from my regular earnings account which was held at another institution to my Me Account.
- Over the years, I have become disciplined and have since canceled the recurring deduction (also saving on bank fees).
- I currently pay myself via online banking.
Track the growth of your Me Account.
- You must have a goal for your Me Account.
- Goals could include treating yourself to something nice or to invest or to pay off some bad debt such as your credit cards.
- My first goal was to buy a car.
Where does the 'extra' money come from?
You are probably thinking by now that you do not have any 'extra' money to pay yourself. If you take some time to analyze your spending habits in detail, you may just be pleasantly surprised at the 'extra' money you will find. I know I was. Here are a few places that I found some 'extra' money for my Me Account.
Concluding words
Saving (and ultimately investing) is a habit. Sometimes you have got to start out small. Just like a newborn child, we have to learn to crawl before we can walk and then run. So there is no need to have small savings shame.
And remember that:
"Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver." - Ayn Rand
About the Creator
Kay Johnson-Clennon
I’m a Wife | Mother | Author | Associate Actuary
Find out more here: https://linktr.ee/kaynijo
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