4 Smart Strategies for those Looking to Save

The more money you have coming in, the more places you’ll find for money to go out. Many families find that they can function very well on a tight budget, but when they start making more money or other expenses decrease, they aren’t any better able to save! If you’re struggling to find ways to save money, try these four smart strategies to get your saving habits on the right track.

1. Take one month and write down everything you spend. Consider making vague notes of what you purchased each time you pulled out your debit card. For example, if you went to your local superstore, what were you there to pick up? Did you just buy basic toiletries, cleaning items, or things that you needed, or were sucked in with impulse purchases? When the month is over, take a real, hard look at where the money has been going. That trip to your favorite coffee shop two or three mornings a week, for example, doesn’t cost you much for one drink, but over the course of the month, it could run you a lot more! Looking at an honest report of where the money is actually going will give you a better idea of what can be cut out.

2. Take the savings out first. If you have the option to split the direct deposit of your check so that you don’t ever even see the portion of your check–ideally at least 10%–that goes to savings, then do so. If you don’t, then make sure that the first thing you do when the money comes in is move your savings over. You can also set up a monthly recurring transaction to make this automatic. If it’s not there where you can see it every time you check your balance, you’ll be less likely to spend it on things you don’t really need.

3. Divide your savings accounts. Keep your emergency fund separate from your vacation fund. You want it to be clear what the money is intended for. Keeping separate accounts will also keep you from losing track of how much you’ve saved up. It might mean that you have a better idea of how much emergency money you really have better, or it might just mean that you’ll be able to take that vacation sooner than you thought.

4. Don’t treat your savings account as an extension of your checking account. Whether you need to hold that account at a different bank, refrain from setting up online access, or simply make yourself a promise and commit to staying out of your savings account unless it’s a genuine emergency, it’s critical that you learn to separate “wants” from “needs” and continue to live within your means. Your savings account is for emergencies, for retirement, or for a college fund, not for you to dip into when your spending money runs short. Make sure you keep your eye on your long-term goals, not just short-term desires.

Developing good saving habits is critical to maintaining the quality of life you want even when emergencies strike. When you’re well-prepared and savings is an important part of your regular financial management, you don’t have to sweat the small stuff. Even better, things that just a few months before would have been a major crisis become small stuff.