You would like to be one of those who manage their budget with an iron fist, but at the end of the month, you always have to face the facts: you can’t save money.
Apart from delicate financial situations (unemployment, large debts, precarious situations, etc.), saving is in reality above all a matter of habit and planning.
In this article, we’re talking about most people who make a “normal” to an attractive salary, but still, feel like they can’t ever put it aside.
And we give you valuable tips to finally succeed in saving money.
saving money: a matter of habit
There are hundreds, thousands, even millions of articles, books, podcasts, or blogs (including Money) that will give you countless tips forspend less, saving energy, getting discounts to pay less for your in-store shopping, etc.
But a distinction is essential to understand: “paying less” is different from saving.
Often, when we wonder why we can’t save money, we really wonder why we can’t save money.
If you are constantly trying to implement new tricks to lower your electricity bills or looking for the cheapest gas pump, then spending all the money saved on 4 fast food a week, you will never have the feeling of saving money.
The feeling is often the same:
“I don’t understand why I can’t save. I pay attention to the prices at the supermarket, I turn off the light behind me, I never buy the most expensive products, but yet at the end of the month I never have enough money left to save”
The problem, a lot of times is that we say no to something… only to say yes to something else.
It is even a very common way of thinking: the fact of having saved in one category suggests that to “reward” yourself for having been careful, you have more room to spend in another.
The final result? We still can’t save money, and we also have the feeling of constantly depriving ourselves and making efforts for nothing.
The unexpected is the enemy of saving
In the vast majority of cases, it’s not spending, in general, what’s stopping you from saving: it’s unplanned spending.
And it is often difficult to realize the real impact of these unforeseen expenses on our budget.
This is among other things the whole thought behind the latte factor theory. Little by little, expenses that seem insignificant to us (a cappuccino at the local café in the morning, a meal out at lunchtime because we’re lazy to cook, a new t-shirt on sale, etc.) eat into our budget.
Attention: That’s not to say you should never give in to the temptation of offering an after-work drink just because you hadn’t planned it. It simply means that:
- You should have a monthly Budget
- Your budget should best anticipate your actual and unforeseen expenses.
For example, plan a pocket of $50 each month for expenses you hadn’t anticipated, and try not to buy more than that, or else just wait until next month.
The trap of saving just to save
This is probably one of the most important steps.
Get out of the trap of “I want to save money but ” to go to the”I want to put some money aside for”.
Because without knowing why you want to save, it will be very difficult for you to stick to it.
And that’s basically pretty rational. Why deprive yourself of testing a new restaurant in town on a whim just to see a number grow in your bank account?
While cooking a dish at home rather than going to a restaurant in order to be able to offer you the trip of your dreams in a few months is much more motivating.
Do the exercise now 📝: take a sheet of paper and a pen and think about your goals, not just financial but life. Do you dream of going around the world for a year? Start your business? Retire early or become financially independent?
Whatever your goals are, list them, and work out how much you should set aside each month to reach that goal within the time frame you’ve set for yourself, or get as close as possible.
Then, make sure you set aside some money for that goal at the beginning of the month, before your other expenses.
It’s called “pay yourself first”, and one of the best ways to avoid feeling like you have nothing to save at the end of the month.
All the categories that correspond to your objectives (in addition to the emergency fund) must appear black on white in your monthly budget software.
This is the only way you can realize that impulsively overspending in one category means taking money from another.
It is on this idea that the so-called Zero Base Budgets are created, of which, for example, the popular software YNAB.
Top tips for saving money
Here is a summary of the key steps to finally manage your expenses with an iron fist
1 – Have a monthly budget
This is probably the biggest reason why you can’t save money: you don’t plan your expenses regularly.
Once you have your budget and start seeing where your money is going each month, you will gradually see your savings build sustainably.
2 – Have a “why”
This is the advice I gave you a little earlier in the article: by knowing why you want to save, you will be able to put money aside much more easily and without having the impression of depriving yourself.
Feeling like you’re getting closer to your dreams and goals with every dollar put aside is much more motivating.
3 – learn to say no
Many of us have trouble prioritizing, and especially putting our long-term, personal interests ahead of short-term excitement. We fear disappointing others, regretting saying no, or returning a bad image.
An invitation to eat out, go on an impromptu weekend, join a paying party… If you constantly spend your savings for fear of saying “no”, not only will your goals be much more difficult to achieve, but you will spend all me your money on things that don’t really make you happy.
4 – Manage your impulsiveness
Can’t pass through a shopping center without stopping you from going in (and buying) in your favorite store? Can’t resist the sweets or other merchandise placed near the checkout counters at the supermarket? Controlling your impulsiveness can be particularly difficult if you don’t put strategies in place to help you.
Always going to the store with a shopping list (and sticking to it), not taking money with you if you plan to go to the mall “just for a walk”, finding a partner whom you ask to prevent you from buying anything… It’s up to you to find the tactics that will work best for you.
And you: do you have other obstacles that prevent you from saving on a daily basis?