Money: We all need to spend it, we all want to get more of it. Unfortunately, doing one often means missing out on the other. Some days it seems that there is no good way to spend on the things you want and need while maintaining a healthy bank account and planning for the future.
Not to fear! United Way is here with 5 key tips for increasing your savings without giving up on spending!
1. Make a plan and stick with it! A financial plan can look different for different people—some may map out every individual expense that comes up in a given month, while others may just decide what fraction of their income they wish to devote to housing, utilities, food, entertainment, and other broad categories. Either way, find a way of planning your spending that works for you and don’t go off track!
2. Set a goal! Want to do big home renovations? Eyeing a new sports car? Planning your dream vacation? Whatever your expensive goal is, keep it in mind whenever you feel the urge to make unnecessary purchases. If you can remind yourself of this goal, you won’t be tempted to waste your money and will save up for it more quickly.
3. Keep track of everything! All the small stuff adds up. The more you can keep track of your small, easily forgettable spending—from the tips you leave at restaurants to the fancy coffee you treat yourself to on a Monday morning—the less surprised you’ll be when you check your bank account. You will also begin to realize what you want to keep spending on and what you can cut down on.
4. Send income directly to your savings! Talk with someone at your bank to decide what fraction of your income should be sent to your saving account. Have it set up to automatically go there. If you put it all in your spending and plan to move some to your savings account later, you’ll be tempted not to move it at all. Having a separate savings account can be a lifesaver in case of emergencies!
5. Make small changes but don’t make yourself miserable! Figure out what you can cut out to save some money, but do not cut out all the things that make you happy. Saving money is crucial, but spending only on the things you need to survive will eventually cause you to make a big impulse purchase. Find a way to strike a balance so that both you and your bank account are happy and healthy!