Every financial expert says “Save! Save! Save!” And we get it. Saving is important. But why? Some people really don’t know how to save, or why they should be saving. You have big dreams, but a small number in your bank account.
Here’s what I do: I think of my savings account as my “Funding My Dreams” account. I don’t know exactly what my life-long dream is, but I know it will be a heck of a lot easier to reach it if I some money in the bank. Here are some effective saving steps that will not only get you on the right track, but literally allow you to soar to your dreams.
1) Shift your mindset.
One of my favorite transformation coaches, Lisa Nichols, said the first step of any transformation is to shift your “mental zip code.” You may be physically broke, but once you develop a mindset of prosperity and abundance, then your life will follow. This is the most difficult part of any change, as well as the most devalued. The reason why most people fail at transforming their finances, health, relationships, etc. is because they keep their old mindset, but expect a bigger and better outcome. Read books that will challenge and change your perspective on money. I’m currently reading Think and Grow Rich by Napoleon Hill. (Book review to come!)
2) Create savings goals.
Be very specific in creating your goals. Within each goal include a timeframe and a plan of action. This is the difference between an empty goal and a plan.
Empty Goal: I will save $500.
Successful Plan: I will save $500 by September 30th by cutting down on Starbucks stops and packing my lunch everyday.
Set three to five successful plans every month, or every other month. These are short-term plans and should lead you to accomplishing your bigger long-term, or yearly, goals. This is how stuff gets done, people.
3) Track your spending.
- Print out your bank statement for the week/ month/ however long your want to track.
- Grabs some different color highlighters.
- Highlight each category in a different color (food, shopping, entertainment, bills, debt, etc.)
- Calculate the totals you’re spending for each category.
This will help you to see exactly where your money is going. More than likely, you’re overspending. If you have a guilty pleasure of going to the mall when you get angry, or online shopping for leisure… you have some real financial soul searching to do. Find the root of your problem and try to figure out why you’re finding comfort in things that are depleting your finances and deterring you from your goals.
4) Do what you can… just do something.
Just like you can spend money fast, you can save money fast. You must find what works for your current situation. If saving $10 a week is all you can afford, you’ll have $520 saved up by the end of the year. Make small changes. Be intentional about saving all the coins in your purse or pocket at the end of the day. My mama always said, “A penny saved is a penny earned.” Or save all of your single dollar bills. If you have more money to work with, take out a 100-dollar bill every time you get paid, keep it in a safe, and don’t touch it, or count it, for a year.
5) Find your why.
Why do you really want to be in a better financial state? What does having financial wealth mean to your life? You really have to dig deep and find your why. It could be for your kids, to move into your own place, to start your own business, or to fund your life-long dream. This will keep you pushing and get your fire burning. Put some umph on your financial evolution.
You have to save for a reason, or else, you’re just going to spend your life away. It takes money to make money.