While the average person understands that saving money for later is a great habit, many still fall short of their goals and expectations. The simple root of their failure is in a weak foundation and poor habits, and improving these two areas will certainly lead to successful savings. The following seven tips are designed to empower and enlighten those that seek the countless benefits of stashing cash for later.
Step One: Start a Savings Account
The easiest way to begin a successful lifetime of intelligent saving is to create a simple savings account. By having an account that is specifically for the purpose of saving money, the idea of saving will become a reality as opposed to an idea. Those that already own a savings account must make a committed decision to take that account as seriously as possible.
Step Two: Create a Basic Saving Plan
Creating a savings plan can be one of the easiest ways to achieve the goal of a healthy financial cushion. By creating a clear outline of the action required to succeed, failure and success will be easy to measure. Without a plan, it is extremely difficult to stay focused on clear goal or measure progress.
Step Three: Liquidate
Having a lump sum of cash to put into a savings account helps to fully transform a person’s old mentality. Those that have trouble saving money almost always lack the core belief that they both can and should save money. Investing a medium-to-large lump sum of money will help to break the old mentality that creates this core belief. Those that lack the start-up capital are best off liquidating some of their old possessions such as jewelry, furniture, appliances or other belongings that aren’t serving a purpose.
Step Four: Develop Clarity of Purpose
Once the saving account has been started, it is critical to develop a sense of purpose around the act of saving. Think of a few reasons why saving is important, and then think about all of the risks of failing to develop healthy saving habits. By developing a sense of punishment and reward, the act of saving will become second nature. In the same way a person knows that touching a hot stove is a bad idea, they can also learn that neglecting to save is a painful ordeal.
Step Five: Switch to Must Mode
The best way to change old habits is to stop thinking in terms of what should be done and to start thinking in terms of what must be done instead. The fact of the matter is that we as humans will always use more energy when we believe that something must be done as opposed to it simply being a good idea. Establish the idea that a healthy stockpile of money is a necessity and the process of creating it will become far easier.
Step Six: Divert Money
Once saving money has become second nature, it’s time to start thinking about ways to improve and grow. The easiest way to do this is to both consciously invest in savings and to develop even more reasons to save. Diverting money is the simple act of eliminating unnecessary purchases and investing the money that would have been spent into savings instead. This habit is the difference between the common “saver versus spender” stereotypes, as someone that values their savings over material goods is often labelled as a saver.
Step Seven: Begin Lifelong Maintenance
The habits of successful saving are all that it takes to develop a strong financial safety net. However, slipping back into old habits can quickly decimate any additional savings; money is easy to spend. Remember that saving money is worthy of a lifetime commitment. Savings accounts should be maintained regularly to ensure that they will serve their purpose.
By following these seven tips, anyone can develop a positive balance in their savings account for the rest of their lives. When emergencies, opportunities or whims come, those with a strong saving will be the best off. Savings can literally be a matter of life and death, so always remember to treat it with the respect that it deserves.
This post was submitted by a guest author.