4 simple strategies for developing a savings habit
Saving money can be difficult. If you’re struggling to put a little away each week, you’re probably thinking you’re the only one that isn’t saving – but that’s not the case. A lot of people struggle to save and there are a few reasons why.
For a start, we tend to prioritise short term needs over long term. Digital payments are making it easier to spend, so it’s also easy to lose track of the small purchases which add up over time.
These things are not easy to overcome, and developing a savings habit can seem daunting at first. The good news is, once you’ve put in the effort to start saving, sticking to it gets easier over time. Here are four simple strategies to get you on the road to your financial goals.
- Track your spending
The first step is to look at your current spending habits. There’s a good chance you won’t remember every single transaction you’ve made in a pay cycle, so you’ll want to check your bank statements for this – it’s much easier than keeping all your receipts. Go through your purchases and figure out what each one was for.
You’ll find that there are general weekly expenses – rent or mortgage payments, petrol, and groceries, while others might not be essential to your life – coffees, snacks, drinks etc. Total up what you’re spending in each category to get a clearer idea of what your actual living costs are and what’s just superfluous spending. From here, it should be pretty clear which purchases need to be culled.
- Create a budget
Once you’ve separated the essential costs from the extraneous, you can create a budget. Measuring your living costs against your income should give you an idea of how much you can save from pay to pay.
The most important thing here is to shift your thinking around saving. Instead of looking at how much you have left at the end of the week, think of your savings as one of your essential costs – something that is put aside immediately, in the same way your accommodation and food budgets are. By approaching your savings in this way, you don’t get a chance to dip into what you’ve set aside as it’s already allocated.
- Set a savings goal
Whether you’re saving for a particular item, a home deposit or you’re just keen to have money available for whatever pops up, setting yourself goals is a useful practise to keep you on track. Since you already know what you can afford to put aside each week, you should figure out how long it will take to hit your goal. Knowing that you’re working towards a savings goal will keep you from “borrowing” from your savings and helps you to avoid compromising what you’ve budgeted to put aside each month.
- Make use of the tools your bank provides
The good news for those struggling to save is that most banks have a host of tools available to assist you. Opening a savings account is one such way to stay on track – these accounts typically offer great interest rates and no monthly fees – meaning it won’t cost you to save and you’ll actually be earning interest on what you’ve put aside.
You can also set up automatic payments from your transaction account to your savings account. You can set these to transfer your nominated amount after each pay comes in. The benefit here is you’ll be saving without having to think about it, or undertake any manual processes to put the money aside yourself. From there, all you have to do is watch your savings grow.
At Beyond Bank, we have a free ‘Beyond Finance Manager‘ tool available in Internet Banking which enables you to track where your money is coming from and where it’s going to or set up a savings goal. It shows you what you need to do to achieve your goal and tracks your progress all the way.
For more information about saving, contact Beyond Bank today.