I hate one size fits all clothing. Let’s be honest- that’s an oxymoron. There’s just no way that a size 6 and a size 14 would look great in the same outfit.
The same goes with savings plans.
There’s no savings plan that’s automatically going to work for you, no matter your situation or personality.
When starting on a savings regime, take some time to think about what is going to work best for you.
Hey big spender
Got absolutely no discipline when it comes to spending? Burn through money as if it’s going out of fashion? Then you should think about automatic deductions from your income. I’m the same- I am weak-willed when it comes to finances, so I need to put systems in place that won’t let me be weak. If you set up an automatic deduction, you won’t have to fight a battle with your better self on a weakly basis.
Fritters and chips
You know how it is- you have some money. It could be $100 or a $1000. Then without any cause and certainly without any benefit, it disappears. You are a fritterer. It’s easy to do; a new CD there, some sushi here, and all of a sudden your savings are gone.
People argue about the value of term deposits, certainly it’s a scheme that struggles to keep pace with inflation. But if you’re the kind to chip away at your money, think about locking it away somewhere out of reach. Think about shares, though I wouldn’t be putting all my savings in anything risky. Anything that can keep you and your well-earned cash at arms reach.
Credit is as credit does
The plastic strangle. We all know the delayed pain/ instant gratification buzz of plastic. It helps us to feel as if we have money, even when we know we have none. If you are plastic-prone, you’ll have chewed away your savings in no time. So your saving plan is to control the plastic. Have one on you for emergencies, and only use it then. Return to a cash economy, try and stop using EFPOS. It costs you a couple of bucks every time anyway. Keep your savings in an account you can’t access via plastic, and watch your savings grow.
Optimism vs realist
Reality isn’t often all that apparent at the start of a savings plan. You’ll kick off, thinking that you can save 95% of your weekly income. If this is you, you’re an optimist. Don’t get me wrong, optimism is great. But if you’re locking away your money, being over-optimistic is going to make your savings plan fall over so fast it’ll make your head spin. One week of near-starvation will make the next spending spree immense. If this is you, sit down and work out your weekly expenditure.
Work out the real expenditure, not what you would spend should your body suddenly be inhabited by an angelic version of yourself. Then work out how much of it you can save. The most important thing is to have a sustainable savings plan, so start small. Build up a routine that you can maintain, and then gradually increase how much you put away.
The last obvious saving personality is the nihilist. It doesn’t matter how hard they try, they never save anything. So they just don’t try. If you’re like this, try saving $50 a week. Do it for three months. If you can handle that, double how much you save. Then double it again. And you’re set.