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I have a confession to make… I used to be in the spender camp (pauses for gasps). At the time I felt like I just didn’t know or fully understand how to save money. This certainly came with a lot of shame. When I reflect on that feeling, I wonder whether it came from external factors or from within. To be honest, it was probably a mixture of both. I always just ended up spending and spending and convincing myself each time that “it would be fine”.
How does the saying go? Insanity is doing the same thing over and over and expecting different results? Ok, I wasn’t cuckoo, but I was a bit cray cray thinking that things were going to change on their own.
I had an unbelievable AHA moment when I heard my favorite finance gal, Shanna Skidmore explaining Spender vs. Saver in a way that I had never heard before. Shanna said that savers save money to feel confident and good about their finances and spenders SPEND money to show that their finances are doing ok. I had never considered that but it was definitely true for me. Like, if I could purchase this expensive thing then I must be doing ok with my finances. This false sense of security is a trap that is going to hinder you in your quest for financial freedom and stability.
The fact of the matter is… I know damn well that I needed to understand HOW to save money and that having money in my bank for things makes me feel better. So I set out to see what I needed to do to become someone who could learn how to save money.
This stuff is not always going to be comfortable. Especially if you have been living in a bit of denial and ignorance. I promise you though, it will be worth it. So, let’s jump right into these five easy tips on how to save money. You can thank me later.
How to Save Money Tip #1: Reduce Visibility
Out of sight, out of mind. This is so true when it comes to your finances! If the money is right there in front of you, physically or on your statement or banking app, it looks available for spending. Not only that you’ll feel drawn and tempted to spend it. I was for sure like this in the past. This is the habit we get into where we check out bank balance, see some money in there, and then spend money that should be saved for something else.
An app that I feel really understands true spending habits is the You Need a Budget App. I know I mention this app/software a lot but guys, it’s changed my finances! YNAB is all about syncing up your bank account and then putting the money into budget categories. Ok, sounds basic right? But the secret sauce is that you then look only at the app, not your bank account balance when looking to see if you “have money”. Your mindset goes from “do I have money?” to “Do I have money set for that?” THAT, my friends, is the game-changer.
If you haven’t hopped on the YNAB gravy train yet you can get 34 days free with this link.
By changing what you see, you then hack all those biological triggers that keep you from feeling like you know to save money (remember those?). When you see what you truly have to spend it prevents you from overspending because it doesn’t appear available.
How to Save Money Tip #2: Separate Spending Account
Despite how freaking awesome I know that YNAB is, I became all too good at rearranging money to accommodate my spending whims. This is literally the definition of self-sabotage!
So, enter phase 2 of my plan. I set up a separate checking account and budget in YNAB that only accounts for my flexible spending budget items. This was the key to how I really learned how to save money.
Let me break down how I make this work. I have one checking account for all the monthly bills and another checking account for the items that I have more “flex” in how I spend. For me, these categories include groceries, gas, “fun money”, dining out, family fun, and dog food.
By keeping the budgets separate in YNAB (you’ll see when I mean when you check out the app) I only view either the spending OR the bills area never both. This way I don’t have the option to move money around as easily.
How to Save Money Tip #3: Saving for Things that Matter to Me
I’m such an advocate for choosing your own path. My fellow solopreneurs and business owners will know exactly what I mean. We can get so caught up in what we think we should want out of life that we can easily silence our own voice which is probably shouting out to be heard. The cookie-cutter life aint it. We are all individuals, so how could the same life blueprint work for all of us.
I HATE those lists of things you “should” be saving for. Those lists never seem to account for other priorities in your life, like fun. Yes, I want to save for retirement but I also want to go on vacation and get my haircut at a nice salon. I want to be able to save for gifts to buy my hubby on our anniversary AND have savings for car maintenance.
Finding the balance of the things I want to save for and the things I should save for took some trial and error. The important thing is to line up your savings with the things that really matter to you. If you care enough about something you’ll be more likely to make the savings happen. You will never magically know how to save money for something you don’t care about. Period.
How to Save Money Tip #4: Automate, Automate, Automate
The less effort the more successful your savings plan will be. I set my retirement contribution up and it increases automatically by 1% every quarter. That may not seem like a lot but it means that I don’t miss it either. It also means that I’m slowly adjusting to having less and less in my paycheck as more is getting invested for retirement.
For my monthly spending goals, I know exactly how much I should save every month. First, the bills get funded, then savings, then whatever is left over is spending money and I have to make it work. And you know what? It does seem to work out somehow, each and every month. Each payday I transfer that week’s spending allowance into the spending account and that’s what we get. We don’t even look at the rest of the money and that means that the goals get met!
How to Save Money tip #5: Use Pay Increases to Increase Savings
Whenever my husband or I get a raise we split the difference between savings and general spending money. 50% goes automatically into savings (usually retirement right now) and then the other 50% we can use for whatever we want.
This gives us the feeling of still having a bit more money in our pockets but also know that we increased our savings too without taking a hit. It’s a win-win!
How to save money. This is just the beginning!
There are so many great tips and savings hacks that you can use to really become the saver you have always dreamed of. Seriously, I used to feel like I was a failure because I couldn’t seem to save. Now that I finally figured it out, I feel so much more confident in myself.
Make sure to get started with these savings tips by downloading the Bulletproof Budget Template below! It’s 100% free and you can reuse it over and over again each month!