If you find your focus on saving money is losing steam, don’t give up. There are some simple habits that can help you get on track and boost your cash reserves without feeling too much of a pinch.
Here, you’ll learn eight habits that can help you get on top of your money and save for short-term and long-term goals that really matter. Whether that means the dream of booking a beach house next summer or putting away enough for your baby’s future education, you’ll see that there’s no mystery to being a smarter saver.
1. Finding the ‘Why’
Saving just to save may not be enough for some to stay motivated. Instead, it could be helpful to figure out your own personal “why.” Why are you saving, what are you saving for, and how long do you need to save to get it?
It can be easy to start saving and lose motivation when life gets in the way: The bills stack up, emergencies happen, the car won’t start, and on and on and on. However, if a person has a reason for saving, or a money goal, in the back of their mind it may be easier to stay the course.
By the way, a person’s savings motivation can be for literally anything their heart desires. Sure, it can be to save for retirement, to buy a house, or to start a family, but it can also be to go on vacation, renovate the kitchen, buy the latest mobile device, or to just have enough in the bank so they can have peace of mind. Make it whatever you want.
When finding money motivation, it can be useful to try to think about financial priorities. A person needs to pay for food, shelter, and clothing, but do they need to have a new phone? Or a new car? A new designer watch or the latest gadget? Before setting a budget and starting a new savings journey, it’s important to think about personal priorities.
2. Building a Budget
To help clarify savings goals, try building a personal budget around the priorities mentioned above. A personal budget makes a great road map for the future and can help keep you motivated to save because you know exactly where your money is going, and how it can help you get the things you want.
• To create a budget, first, start tracking all personal spending. To do so, gather all account information and sift through a few month’s worth of expenses. Don’t forget about commonly forgotten expenses, such as birthday gifts for friends and family or insurance premiums.
• Next, determine how to categorize expenses. Getting too granular can make it challenging to track. Consider keeping it generic with categories like “groceries,” “shopping,” “entertainment,” “health,” “home,” “bills,” “medical,” “car payment,” etc. Try to make sure every dollar spent has a home somewhere.
• Then, plot out the next few months of anticipated expenses and see how much cash is left over. This can go into some type of savings account.
• If you want to save more, you can take a critical eye to your purchases and see where you can cut back on spending. For example, not using that gym membership? Cut it. No longer reading that magazine subscription? Bye-bye. Every little bit can help.
3. Saving Little by Little
Once your priorities are in focus and your budget is set, it’s time to actually start saving. Yes, it can be thrilling to drop a whole heap of cash into a savings account, but the thrill can wear off after a while. Instead, try saving little by little. This way, you won’t feel the pinch and it won’t feel like you are missing out on the fun stuff just to save for a hypothetical future.
One strategy is to automate your finances and set up recurring transfers, so that money is saved without much effort. This can help a savings account add up without feeling like an effort, which could have major effects on your motivation.
4. Try Walking Away From Impulse Spending
There are a lot of spending triggers in this world. Sales, pretty items, shiny objects, nights out, the list goes on and on. Sometimes, the best thing people can do is walk away before purchasing or saying “yes.” Take a night out with friends as one example. Before immediately responding “Sure,” you could say, “Can I get back to you?” and then really think about whether you really want to attend or if it’s just a habit. Set an alarm for 30 minutes, and decide when the timer is up. Allowing yourself a minute to step back, can help you be intentional with your spending.
For bigger purchases, people can try the 30-day rule. It’s a financial strategy that can help people regain control over impulsive and compulsive shopping. Basically, if you see something you want to buy but don’t necessarily need, you just stop and walk away. Not just for a minute, but for a full 30 days.
Next, write down the item you want to buy and where you can find it, along with the price. Put it away and set a calendar reminder 30 days from that date.
At the end of that timeframe, if you really still want the item, you could return and purchase it. However, after a month has passed, you may no longer feel the urge to buy or may have forgotten the item altogether. As a bonus, if you get to the end of the 30-day block and decide you no longer need the item, you could put the amount you didn’t spend into a savings account to use the money toward your priority list instead.
5. Setting Short-Term Savings Goals
Saving for long-term goals, like retirement, is important, but don’t overlook the small stuff. Setting a savings goal can help people know there is an end in sight.
One place to start is establishing an emergency fund. Having an emergency fund can provide stability should you run into, well, an emergency.
Other shorter-term goals might include things like new furniture, a vacation, or a renovation. Having these smaller goals can make saving for something as grandiose as retirement seem less intimidating.
Recommended: Guide to What Is and Isn’t a Financial Emergency
Whatever it is, find a number and stick to it. Then, once you hit that goal, you can set another and start the entire process over again.
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6. Remembering to Reevaluate Every Now and Then
After setting a priority, budget, and goal, it’s important to also set reminders to reevaluate those markers from time to time too. One way to do this could be making it a New Year’s resolution to look at money goals and see if they are still in line with your personal goals.
Life changes and finances may need to change with it. It’s okay to reallocate the money already saved and put it in a new bucket.
Perhaps you began saving for a vacation but had a baby along the way and want to start saving for their college education instead. Or maybe someone switched jobs within the last year and is making more money now. They can readjust their budgets and savings plans to fit their new financial outlook. The same goes for those who may have lost work too. Reevaluating, reprioritizing, and reallocating can help make financial change more manageable.
7. Telling Others About Savings Goals
Sometimes, the best thing one can do to stay motivated is to let others know about their plans. You can let your inner circle in on your savings goals and priorities and ask those trusted few to help you stay on track.
By letting people in on plans, you can also avoid any tricky situations, like having to say “no” to events, parties, or nights out because people already know you are trying to save. The inner circle could also help keep you on the straight and narrow when it comes to wants vs. needs and help to keep financial goals in sight.
Recommended: How to Reward Yourself Without Breaking the Budget
8. Organizing Your Savings
Being able to see your savings grow is perhaps the best money motivator out there. There are a number of financial apps that can help you see your finances all in one place. Some even offer visual representations, such as bar charts and graphs, so you can see just how much your savings have grown over time. That can be very motivating!
The Takeaway
It can be easy to lose motivation when saving money, but with a little effort, you can adopt new habits to help you through. Those might include building or tweaking a budget, trying the 30-day rule, setting short-term goals, and sharing your financial goals with a few trusted friends or relatives.
SoFi can also be a trusted partner in helping you save money. With a SoFi Checking and Savings Account, you can create multiple financial Vaults within your account to help you save toward specific goals. You’ll also earn a competitive annual percentage yield (APY) and pay no account fees, both of which can help your savings grow faster.
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As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.20% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
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