Disciplining yourself to save is hard. But that doesn’t mean you should just throw it all to the wind and carelessly kiss it goodbye. Especially because you KNOW it’s something you should be doing. And that if you don’t, it will definitely catch up with you later.
Pay yourself first.
You keep promising yourself that you’ll stash a little extra money away into your savings next pay cycle, but somehow it never happens. Sound familiar?
The problem is that by the time you’ve paid for everything else – rent, groceries, utilities, a few dinners out – there’s usually not enough left over to add to your savings until the next paycheck comes in. And so the vicious cycle continues. Rinse, repeat.
The trick is to treat yourself, or rather your savings account, as a bill that needs to be paid before any of your other bills can be paid.
Make your savings hard to touch.
And by hard to touch, I don’t mean go and bury it in the backyard or put your credit card in the freezer, though that could work too. Most people lack self-control when it comes to their finances. Research by UBank found that almost half of all savers admitted to regularly dipping into their savings account for other spending needs. So why not remove the temptation altogether by just making it harder to access your savings.
Go for a high-interest savings account.
Unlike an everyday transaction account, a high-interest online savings account is specifically designed to help you save your money, not spend it.
Switching to a high-interest savings account that pays more interest on your money is probably one of the easiest steps to take towards saving more money and making it work harder for you. Examples of them are piggyvest and cowrywise that gives you a bonus ad also interest the moment you start saving.
Automate your savings.
Employing the ‘out of sight, out of mind’ philosophy works on your finances too.
By automating your savings, you never see the money so you won’t be tempted to spend it on things you don’t need.
There are a few ways you can do this. You can ask your employer to automatically put a portion of your paycheck into your savings account. You can also set up a direct transfer from your transactions account once payday rolls around. Most bank accounts will let you do this.
By automating your savings, it’ll happen automatically so you can’t sabotage your own efforts by ‘forgetting’ to transfer the money.