Saving Money Doesn’t Need to Be Stressful
Let’s talk about how to focus on saving money while still enjoying your life and not becoming excessively frugal.
To focus on saving money, you need to have a goal that motivates you to save.
It also helps to create visual reminders of this goal that you see daily.
Next comes the logical part of the equation. You need to spend less than you earn each month.
This means you need to do one of the following:
- Earn more
- Spend less
- Do both
Written By Tiffany Woodfield, Financial Coach, TEP®, CRPC®, CIM®
People often make the mistake of assuming that if they earn more, they save more.
However, it’s not uncommon to change your lifestyle as your incomes increases. When this happens, you don’t save more. Basically, you need to be aware of your spending regardless of how much you earn.
We’ve all heard stories about celebrities who earned millions upon millions of dollars only to wind up broke or bankrupt. We don’t want to follow in their footsteps.
How I Approach Saving Money
What helps me in saving money is having a clear goal and reason for wanting to save.
When I worked part-time while going through university, I had friends who were already in the workforce. They would go to restaurants and show up wearing the latest trends.
Meanwhile, I had limited funds and was trying to save for a big trip when I finished school. Because I had this big trip in mind, I was sacrificing and saying no a lot. I wasn’t doing all the things that my friends were doing. But I stuck with my plan by continually reminding myself of my greater goal.
I’m not going to say it was easy; but in the end, it was so worth it! And the memories of that trip are with me today.
As I’ve gotten older, I continue to focus on creating clear and compelling goals for myself so that I know why I’m saving money. I love having something that I’m working towards. And I like having a vision for the future that drives me forward.
What is an easy way to make a simple budget?
An easy way to create a simple budget is to set a goal and then determine how much money comes in and out each month.
Then, determine how much you need to reach your goal. Next, start tracking your spending and cut back on discretionary items.
Finally, set a timeline and create an action plan for achieving your goal.
None of this has to be complicated. Just grab a notebook and create a plan. Or create a simple spreadsheet. Just remember that taking simple actions and small steps is better than doing nothing.
How do I stop spending money on things I don’t need?
To stop spending money on things you don’t need, follow these simple steps.
- First, before making any purchase, pause and ask yourself, “Why am I buying this item? Is it for an instant dopamine hit or because I was feeling down?”
- Next, ask yourself, “How do I usually feel 2-3 days after making a purchase like this? Do I feel good or bad? Is the instant gratification worth the days or weeks of feeling bad for spending on it?”
- Finally, determine what you need to make you genuinely feel filled up and happier.
In many cases spending acts as a band-aid. But the problem you have can’t be solved with a bandaid, so it won’t help you heal.
Instead, get curious about what will make you feel better for more than a day or two.
The real problem with overspending is it can lead to depression and further anxiety. Especially when it puts you over budget and when it isn’t something you value. So, know the “cost” to your mental health and bank account when you spend money on things you don’t need.
What small changes can help me save money every day?
The small changes to help you save money every day are:
Visual Reminders:
Your savings goal should be somewhere you see it at least twice a day: in the morning before you leave and before you go to bed. You can also keep it on a piece of paper in your wallet.
Questioning Yourself:
Before every purchase, ask yourself if this is worth more than achieving your most important goal. Think about your goal before spending will make you accountable for your spending.
Tracking:
Track your progress each month and celebrate the little wins each day. At the end of the day, just before bed tell yourself how you took steps towards reaching your goal.
You can say something as simple as, “Wow, good job bringing your lunch today.”
Every little thing counts and as you start saving, it becomes easier. Also, it is equally crucial if you go off track that you don’t beat yourself up and instead acknowledge that it is a process and tomorrow will be different.
How can I set savings goals that are easy to reach?
I recommend starting with smaller goals when first getting started.
These goals need to be “SMART goals,” which are specific, measurable, achievable, realistic, and set to a timeline.
Once you have created the goals, write an action plan for achieving them and then track your progress.
How do I stay motivated to keep saving money over time?
To stay motivated and save money over time, create achievable and specific goals.
If your goal is larger like purchasing a new home then have smaller attainable goals that can keep you motivated along the way.
Often, people don’t realize that impulse spending only brings them a very short amount of happiness. Instead, imagine how good it will feel to buy something you love without guilt!
How can I train my mind to save money?
To train your mind to save money you need a clear reason you want to save money that you see daily.
Then you need tools to help you create this new pattern such as:
- only carrying cash for discretionary spending
- having automatic savings go out of your account each month
- following a budget
- tracking your spending
- starting a mindfulness practice
What is the 30-day rule?
The 30-day rule is designed to curb impulse spending by setting a rule that for non-essential items where you wait 30 days before purchasing. It is simple yet very effective because it makes you more mindful of your spending. It also helps to create clarity on what you truly value.
Final Thoughts
It can be hard to save money, especially when society constantly flashes new and beautiful things that promise to make us happy.
Always pause before purchasing and wonder if this purchase will make you feel better. Or is there something else you need to nurture your soul?
By appreciating the cost mentally to your well-being and physically to your wallet, it is easier to say no. Also, the feeling is incredible.
There are no guilty feelings when you buy something you have saved up to purchase!
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About the Author
TIFFANY WOODFIELD is a financial coach, cross-border expert, and the co-founder of SWAN Wealth based out of Kelowna, BC. As a TEP and associate portfolio manager, Tiffany has extensive experience working with successful professionals who want to leave a legacy and enjoy an adventurous, work-optional lifestyle. Tiffany combines extensive knowledge from her background as a financial professional with coaching and her passion for personal development to help her clients create a unique path that allows them to live their fullest potential. Tiffany has been a regular contributor to Bloomberg TV and has been interviewed by national and international publications, including the Globe and Mail and Barron’s.