When you open a bank account, the bank tells you that you “should” also have a savings account. But they don’t tell you why, or how to save money, just that you should have this account.
The act of saving money is a learned experience – it’s not something that we automatically know how to do. We are taught by parents or family members, and certainly not taught at school. It’s a skill that we have to learn and practise, and some people are better at it than others – some people have to keep trying different things until it works for them.
Here are my favourite tips to help you start saving today!
Be Clear
If you struggle to save money, ask yourself what you want to actually save for?
Be specific. Be detailed. Think about how much you need and over what timeframe.
Then work out how long it might take you to get the money together to buy exactly what you want.
Set up a separate bank account for it and start transferring money into this bank account (on pay day) as your reward for looking after your future self.
An Example
For example. If you want this gorgeous teal Tesla (one of my favourite colours! spotted on Batum Island, Indonesia), you might set up a bank account called “gorgeous teal Tesla”.
If it costs $60,000, and you want to buy one in 2 years, this would be $30,000 per year.
Or $2,500 per month. Or $576 per week.
Of course, you can finance it, but there will likely be interest charges and you could end up paying for the car for a lot longer than 2 years.
You get to choose what you want to spend your money on. You get to choose what’s important to you.
A car might not be important for you. But what could you save for instead?
What Could You Save For?
If you’re not saving money right now – it might be because you haven’t defined what that purpose is.
Here’s some of the things that people want to save money for:
- Financial freedom (the choice to work or not work)
- House deposit (the security of not having to move)
- A car (the freedom to go places)
- A caravan (a wish to explore new things)
- Overseas holidays (having adventures)
- Health (healthy body, healthy minds)
- Clothes and shoes (yes! you can put aside money for this every pay, so that you can splurge at your favourite shops every now and then and be in budget)
Define what you want to save for, define what you’re willing to spend out of that account, and get cracking. I can almost guarantee (based on all the stories from myself and my clients) that within 3 months you’ll have more money in your bank accounts than ever before, because separating your money and giving it a real purpose, you make choices that suit what you want right now.
Track Your Progress
A great way to feel connected to the money and what you’re saving for is to track it. This means monitoring it and celebrating all the steps along the way – not just the final step of purchasing (although that’s the most fun to celebrate!).
Ways You Can Track Your Savings
- Colour in a thermometer type picture
- Use a sticker chart and add a sticker for each deposit or thousand
- Keep a copy of what you’re saving for as a picture on your home page of your phone or on the fridge – somewhere you’ll see it often – and if it makes you smile – this is what keeps you going
- Set up calendar reminders to tell you to celebrate!
- Create a pie chart and fill in where you’re up to for a visual reminder
The Delayed Gratification
What I love about having separate bank accounts dedicated to a specific spending pleasure, is that you can get excited about spending the money when it’s time. The delayed gratification of waiting to buy your thing (or things) means that you can use them with pride – knowing that it’s been worth it – and then it is proof that you CAN save money, meaning that you’re bettering your skills, and are able to save money more frequently.
Disclaimer: This information is general in nature and doesn’t take your personal circumstances into account. Always seek professional advice for your specific situation.
