With prices on the rise these days, it’s easy to see and feel the impact of inflation on your wallet. If we’re not careful, we can look at our bank statements and wonder: “I just got paid. Where did all the money go?”
In fact, research reveals that more than half of Americans live paycheck-to-paycheck.
As lifelong earners, however, we are familiar with these stats and we strive to beat the status quo all the while promoting improved financial situations for ourselves and everyone in our communities.
With precise recalculations to assess your savings goals, here are 5 theoretical and practical ideas.
1. Adopt a savings mindset
First things first, successful habits with money – like most everything in life – start in our heads, not our pockets.
Starting with our why and grounding ourselves in the main purpose for what we are trying to achieve provides the strong foundation and motivation to save more and meet our financial goals.
In short, saving money routinely is more than just a rote exercise. It is a critical part of how we live our lives.
A key point around saving is to make it a priority. It’s okay to start small, big, or at any interval in between. The goal is just to get started or to keep going.
2. Live below your means
Be careful. It’s out there. Looming in the dark. Nestled in the shadows. On the hunt for you and for me. A real life monster:
The lifestyle creep.
This hideous character is indiscriminate. It doesn’t matter how much money you make, where you live, or what you can afford. The lifestyle creep can smooze its way into our lives such that when we check our accounts we literally scream, “Ahhh!”
But, no fear. As lifelong earners, we remain on guard. When you receive a raise or extra money comes in through a side hustle, this is an opportunity to direct these extra funds towards your savings or other financial goals.
As you begin to make more money, celebrate your progress. If you live below your means, using money for what you truly need, you can find financial peace and security despite internal and external threats to what you are building.
3. Automate your savings
Finances have a way of getting increasingly complicated in all stages of life. We have more responsibilities and there are often more urges to spend. In Atomic Habits, James Clear provides a powerful statement: “Goals are good for setting a direction, but systems are best for making progress.”
A popular personal finance strategy to systematize is to pay yourself first. This can help you make sure that enough income is saved or invested first before monthly expenses or discretionary purchases go through. Moreover, if we never “see” the money in our accounts because of automated withdrawals, we don’t have the urge to spend it. This approach is pretty incombustible. So, consider setting up recurring automatic transfers to:
- Retirement savings account
- Emergency or Life Fund savings account
- Debt pay-off
- Down Payment fund
- Dream vacation
- etc.
Automation also helps us put everything on auto-pilot. Set it and forget it. With so many tech hacks these days, it is pretty straightforward to pay bills and direct your monies towards your specific targets.
4. Monitor your progress
Schedule routine financial maintenance with yourself to see if your savings strategy is actually working.
Mark your calendars. I’m serious. Take out your phone or your pen and paper notebook and jot down a reminder for when you are going to review your financial situation. Perhaps, once a week, once a month. Sunday evenings at 7 PM? Payday Fridays at 6:45 AM? Your call for what works best with your schedule.
I’ll wait.
Did you do it, friend?
By taking a closer look at your financial situation according to a frequent schedule you outline, this will help demystify your progress and give you clarity to see what’s going on as you meet your goals.
5. Stay motivated!
Saving money regularly and consistently can be difficult because life can throw unexpected curveballs our way. However, building up towards our savings goals is totally possible and attainable. Celebrate your wins and progress. You can use positive affirmations. For example, “Vacation to [insert dream location], I’m coming. Almost there!” Or you may wish to use a visual savings tracker so you can see the dollars stacking up. You can also share a savings goal with family and friends so they can also cheer you on and maybe be inspired to take on more goals of their own.
Our savings goals are within our reach as we take on the right mindset, live below our means, automate our savings, monitor our progress, and stay motivated. We got this!