So you want to become a better saver. You crave the satisfaction you get from saving money and you want to supercharge your efforts in order to save more. Now what?
Well for me, saving money is one thing, but in order to become a better saver – I need to remind myself of some core principles. These core principles remind me why it is that I want to save money and the tangible benefit I will receive for my hard work.
Here are the ways you can become a better money saver.
Focus on what your savings is going to bring you
The whole point of saving money is to free up your money to spend on things you want, rather than things you have to. Focus your mindset on what it is you are trying to achieve and the benefit it will bring you, your family or friends.
Perhaps it’s that smile on your childs face at Christmas time from getting him/her that present they wanted. Perhaps it’s making memories on a family holiday that you saved for, paid for in cash and will never forgot?
The trick is you need to remind yourself why it is you are saving money in teh first place. Money cannot come with you into the afterlife, so never save just for the sake of saving. Save to get ahead, afford to live, go on holidays and more.
Pre-empt future money needs and use as motivation
To be the best saver you can be, you need to focus on what expenses or outgoings you may have within the coming years. Start setting cash aside for things you know you need to pay well ahead of time.
There is no point saving money all year only to be completely caught short when the car rego comes. You need to have these expenses accounted for and never be caught off guard when it comes to paying them.
Use your expenses as motivation. I am motivated to set money aside for my yearly life insurance premiums, why? Because they are important to me (albeit slightly expeivnse) and it means that if something happens to me, my family will be OK.
I also think about ‘what if’s’ like ‘what if I lost my job?’. I am scared legless that if I lost my job, I wouldn’t be able to repay my mortgage or expenses easily. So what do I do? I put aside savings to ensure I can cover expenses for a good 2-3 months should the worst happen. This provides me a level of comfort that I cannot explain.
Learn what spending actually costs you in relation to your salar
This is an oldy but a goody. Figure out how much you earn per hour after taxes. You can do this by dividing your pay cheque by the period of time it takes you to earn (and your daily hours).
Once you know your hourly rate, you can start to remind yourself every time you hand over, say $20, that it is costing you 1 or 2 hours of your time to afford. You can then ask yourself ‘is this worth it?’.
To be the best saver you can be, you need to remember that your earnings in life are finite. Every hour you work you won’t get back in this life. Never disregard money in that regard as every dollar counts.
Stop trying to keep up with your friends & feel better by buying things
They call it ‘keeping up with the Jones’ – you know those neighbours you have that always have a flash new car and immaculately dressed kids.
The trick to being the best saver imaginable is to stop trying to keep up. Stop spending money to appease others and instead focus on saving money for your own passions.
It’s also proven, time and again, that buying things make us feel good for a few minute, but over the longer term do not actually bring as much fun as we think they will. Basically what I am trying to say is the idea of buying stuff is more fun than actually owning it.
Chase passions, not possessions
Stop trying to save money to buy a possession. what you really want in life is passion. Save money to spend on things that bring you fun, experiences and memories. Things like holidays and days out with family and friends. Life is about having fun and doing things you love. Not the latest gadget that you believe will improve your life and bring you happiness.
Final quick tips to become a better money saver
Aim to make saving money second nature, try and automate your savings where possible and create a separate account to stash the cash away.
Find ways to always improve your motivation to save money and make it your duty to chase methods of investing and growing your money – you want the money that you have today, creating money for you to use tomorrow.