Saving money doesn’t come naturally to everyone. Some people are wired to save – for others it takes a bit more discipline; but developing good savings habits can do so much for both your financial wellbeing and your future security.
Just like money compounds over time, so do our habits. The more we see progress, the more progress we make but often it’s getting started that’s the hardest part. We share seven habits that can shake up your saving – and if you think you’ve heard them all before, read on for a new take that could see you start to change your ways.
- Lessons from Japan
The Japanese are well known for their ability to master the art of minimal living. Decluttering (or Marie Kondo-ing) the home turned into a global craze as people caught on to the benefits of going back to basics. When it comes to budgeting and savings, the Japanese have nailed that too, with a super simple yet effective journaling method called Kakeibo – pronounced “Kah-keh-boh”.
The power in Kakeibo comes from being mindful with your spending and saving – sitting down at the beginning of each month and reflecting on what you want to achieve and how you plan to get there.
The process focuses on four key areas:
- How much do you have to spend?
- How much would you like to save?
- How much money are you spending?
- How can you improve next month?
If Kakeibo sounds like something you could work with, use a notebook to jot down your thoughts on the four questions each month. Taking time to check in on your spending and saving priorities is a great first step towards behaviour change.
- Mapping out your milestones
As humans, we like making progress and it gives us the confidence and motivation to keep going. That’s why taking on too much and trying to get from 0 to 100 overnight is never a good idea. Just like building up your fitness, building your savings stamina takes time and training.
The beauty of having your goals and milestones mapped out is that you can stop to look at your plans before you make a sudden spending choice. It helps you keep the big picture in mind and if you happen to fall ‘off the wagon’, you have a roadmap to get you back on track.
- Creating your money mantra
Self talk is an extremely powerful tool and it can work for or against us. Repeating a mantra to yourself when thinking about a purchase – and intermittently throughout the day – can help keep you focused and in control of your spending.
Here are some examples of what a money mantra could look like:
“I spend wisely and with purpose”
“I am in control of my spending at all times”
“I make good money decisions every day”
- Interrupting the click and repeat cycle
Living in a world where services are subscription based or on repeat does make life convenient but it can take away some of our control over what we’re spending because we’re not actively deciding to spend the money – it just happens over and over again.Many subscriptions, such as Netflix, don’t offer an alternative but that doesn’t mean you should ignore just how much these regular expenses can add up. Make a habit of putting your monthly subscriptions under the microscope and think about whether you really need them or if you can get a better deal.
- Avoid ‘urge surfing’ by taking the one week test
Sometimes it’s hard to know what we really need and what we can do without. Rather than spending too long thinking about it, or just giving in to every impulse buy, use the one week test as your filter. - Pay yourself first each month
It might sound counter intuitive but rewarding yourself for your efforts can be a great way to keep you motivated. Let’s say you pay yourself 10% of your income each month for spending on whatever you like. If the 90% leftover, is enough to cover your monthly expenses you can feel pretty good about splurging with that 10%; and if that 90% of your income still leaves you short, maybe it’s time to find out if you can save on those fixed costs like rent, subscriptions and bills. - Modern day tools in your savings toolkit
If manually tracking your spending sounds like hard work, there’s plenty of tech available to help you. Apps such as the Canstar app, Pocketbook, Goodbudget and MoneyBrilliant are just some of the options to help track your spending and set goals for savings with ease.
And if an app isn’t your bag, a trusty Excel spreadsheet will do the job just fine but you’ll need to remember to keep it up to date.
Source: Insignia