Volumes can be written about the psychology behind saving money, but if you’re just starting out trying to save you want real actionable steps to getting some savings built up. Each of these steps can be taken easily, quickly, and can also be expanded to larger scale savings.
1. Every Little Bit Helps
People often get discouraged when they cannot seem to save money rapidly enough. If it were a race, slow and steady wins. Save a dollar here and there, even a few cents, just don’t touch it unless you absolutely have to. There are even apps that can help you save by rounding up purchases automatically and either saving or investing the spare change. This can be incredibly powerful for people who use their debit cards constantly.
2. Know What You Should Be Saving
You know that you need to save, but do you know how much? Figuring out what you want to save for, and saving in small incremental goals, can boost your saving success. Save up for something small first, then add on to that, increasing until you have the savings and emergency funds you need for any rainy day.
3. Make Saving Easy
Saving money shouldn’t be hard. It shouldn’t require you to live like a pauper. One of the easiest ways to save is to gamify it. When you set goals and reach those goals, be sure to reward yourself.
If you like ordering pizza but spend way too much on it, keep track of the times you’d order, and instead of ordering save that money. Once you’ve saved through 4 pizza delivery cravings, treat yourself to a pizza on the 5th. That way you’ve got a nice pile of savings, and a small reward.
4. Clear Your Debt
Debt is frequently one of the more challenging things to overcome before you can begin saving. It can wipe out any progress that your savings and interest give you. If you have high-interest debt like credit cards, focus on paying that down quickly. While you do this, try to save a small amount, even $20-$30 per month, to help you break the cycle of credit card use.
5. Pay Yourself First
This is one of the older methods for saving, but it’s one of the easier ones to implement and it helps change your saving behavior. It’s simple, establish a percentage of your pay that you will save and not touch. Many people set this at 10%. So for every hundred dollars you earn, stick ten in savings, and watch that pile up quickly.
6. Generate Cash
Generating cash might sound crazy, but it’s a legitimate technique for saving. At the simplest, this can look like a credit card with a cash back bonus, where the cashback is dropped into a savings account and left there. More aggressive generation methods are running side hustles, getting a part-time job, or even selling extra stuff to make a few bucks that you don’t need for bills.