Whether you struggle to save any money at all, or you just want to increase the amount you’re able to save each money, I firmly believe that we all have room for improvement in our financial lives. But unfortunately, wanting to save more money just isn’t enough. I mean, we all want to save more money, but it’s only the people that take action that achieve the results they want. But in order to know what action you need to take, you have to answer one question: how do I get better at saving money?
In short, if you want to get better at saving money, the first thing you should do is get on a written budget. Then, you should get in the habit of saving before you spend. In other words, every time you earn a paycheck you should deposit money into your savings account before you spend any of it.
But let’s be honest, that’s a little easier said than done. I mean, isn’t there some kind of ‘simple fix’ to get better at saving money that doesn’t require a ton of time, effort, or discipline?
While I wish that were the case, there’s really no substitute for the hard work it takes to save money. I do, however, have a few tips that can make the process of saving money a lot more productive and enjoyable.
So, if you’re ready to increase your savings, and you’re also willing to put in the work, here are my top 7 ways to get better at saving money.
1. Live On A Written Budget
As I mentioned at the beginning of this article, if you want to get better at saving money, the very first thing you should do is get on a written budget.
In fact, your budget should become the central hub for all of your financial decisions. Whether you’re trying to save more money, invest more, or just plan a vacation, every decision you make should start with your budget.
When done correctly, your budget will provide you with every bit of information you need in order to make sound and wise financial decisions. It will also hold you accountable in those weaker moments when you feel like spending money on something you shouldn’t.
But how do you budget correctly?
Well, around here, the only method we recommend is called zero-based budgeting.
What Is Zero-Based Budgeting?
Put simply, zero-based budgeting is a method wherein you create a plan and purpose for every single dollar of income your earn. As opposed to breaking your income into broad categories and trying to control your spending on the fly, a zero-based budget requires you to plan your giving, saving and spending ahead of time. That way, you know exactly what you can and can’t do with your money throughout the month.
Beyond that, a zero-based budget forces you to assess and address all of your spending habits. Which is one of the best ways to reduce wasteful spending, and increase your monthly savings.
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2. Save Before You Spend
The main benefit of creating a zero-based budget is that you’ll know exactly how much money you can put into savings (or investments) each month before you ever spend a dime of your paycheck. Therefore, the very first thing you should do after creating your budget is to actually move that money into your savings account.
Seriously, you should do this before you spend money on anything at all — including your bills. Yep, I’m talking about your rent, mortgage, groceries, utilities, or anything else. With your zero-based budget in place, you should know exactly how much money you can save, give and spend. So, give what you budgeted to give. Save (or invest) what you budgeted to save. And once you’ve done both of those things, use whatever’s left to pay for all your other expenses.
This is how wealthy people handle their finances. And if you want to get better at saving money, then this is a habit you need to adopt.
3. Identify Your Spending Triggers
Here’s the thing, you can budget, save before you spend, and do just about everything else right, but if you don’t identify your spending triggers, you are going to struggle to save money.
Ok, but what’s a spending trigger?
Basically, a spending trigger is an emotion, situation, place, or person that tempts you to spend money when you shouldn’t. Whether it’s a retail store you love, an invitation to grab drinks with friends after work, or just boredom, spending triggers come in many forms.
And, if you want to get better at saving money, it’s important for you to identify and avoid your spending triggers as often as possible.
4. Set More Inspiring Financial Goals
One of the biggest problems I have discovered with people that struggle to save money is that they lack the inspiration to do so. In other words, rather than saving toward an inspiring goal, they are usually just saving money because they know they should.
And while that might work for a while, it never lasts. I would know because I used to be one of those people.
Therefore, if you want to get better at saving money, you should take some time to assess what you really want to achieve in your financial life, and then set some goals to achieve those things.
- Do you want to save $25,000 to protect your family from emergencies?
- Do you want to save enough money to take a tropical vacation every single year?
- Do you want to save $10,000 so you can quit that job you hate and start your own business?
Whatever it is that inspires you, set it as a goal, and get after it. The more excited you are to save money, the higher of a priority it will be in your mind, and the easier it will be.
5. Put Your Savings To Work
If you’re sitting on an emergency fund that covers 3 to 6 months of your living expenses, and you feel like you’re just saving for the sake of saving, then it’s time to put that money to work.
What do I mean?
Well, it’s time to take advantage of the power of compound interest and start investing your money rather than putting it into a savings account.
In my experience, investing serves 2 purposes. First of all, it gives you the opportunity to earn more interest, which is how you build wealth. And two, once you start seeing your money grow, that, in turn, inspires you to invest more money.
It’s a really fun cycle that can lead to amazing things in your financial life.
So, if you’re feeling a little underwhelmed with the idea of putting more money into your already well-funded savings account, it’s probably time for you to start investing your money.
6. Live Debt-Free
If you want to not only get better at saving money but also increase the amount of money you’re able to save, one of the best things you can do is get out of debt. Beyond that, you should work toward living a completely debt-free lifestyle.
Think about it like this, if you didn’t have any monthly debt payments, from car payments to credit card payments and even your mortgage, how much more money would you be able to save or invest each month?
I asked myself that same question a few years ago, and it led my wife and me to pay off all our debt. Since then, we’ve been able to save/invest a much larger portion of our income, and it has made the whole process of saving money a lot more fun.
Now, I realize that this goes against the grain of our modern society. But still, I highly encourage you to give it a try. If you get rid of all your debt, your financial life will be much simpler, and you will drastically improve your ability to build wealth.
7. Focus On The Process
Last, but certainly not least, if you want to get better at saving money, then you should work to improve the things that result in more savings.
By focusing on, and improving the process, you will have a much easier time saving money.
While there’s no substitute for hard work and discipline, if you want to get better at saving money, there are quite a few things you can do to make the process more productive and enjoyable.
Whether it’s getting on a zero-based budget, saving before you spend, or identifying your spending triggers, even a few simple adjustments to your lifestyle can drastically improve your savings.
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