Strategies for spending less and saving more
Rising prices on rent, groceries and gas have made it tougher for many Americans to stretch paychecks from one direct deposit to the next. And whether or not our economy dips into a textbook recession, we’ll likely continue to feel the impact of decades-high inflation for a while.
Savings is the best prevention method
As families have more trouble making ends meet, their ability to save also has suffered. A 2022 survey from Bankrate reveals the following:
Only 4 in 10 U.S. adults say they have enough money in savings to handle an unexpected expense of $1,000.
With the COVID pandemic – and devastating winter storms – we’re reminded emergencies happen all the time. They’re never convenient and often costly. That’s why having a cushion of cash tucked away in a savings account is one of the best ways to guard against using high-interest credit cards or loans to pay for unforeseen expenses.
If you’ve had trouble saving in the past, don’t sweat it. Now’s a great time to resolve to save more in the months ahead. Here are some proven strategies to set yourself up for consistently spending less while stashing more of your hard-earned money aside for a more financially healthy future.
There’s an app for that
Those with access to the SavvyMoney tool can take advantage of an online budget planner to help track your spending night or day. Credit Union members can also utilize the MoneyManagement tool within Online and Mobile Banking. Other apps and online tools are available from financial institutions to help keep tabs on account balances, pending deposits and a host of other financial data. Once you begin depositing money into a separate savings account, tracking your progress by checking on your account balance every few weeks can feel as good – if not better – than the rush you get from buying new boots.
Build a buffer
Sometimes, we have annual expenses that get us into a tight financial spot year after year. It can be auto insurance premiums, your property taxes or school-related expenses.
To create a buffer, give yourself some grace and do the following:
- Open a separate account at your credit union or bank, aside from the one holding your emergency fund
- Divert some money every month to handle those unexpected expenses that often sneak up
- Use your buffer funds to help cover unplanned expenses
Do a daily check in
When you wake up in the morning, take one minute to think about what you’re saving for. It helps to create a picture in your mind of the reason you want to save for the future. Maybe it’s so your child can attend the college of their choice. Picture them in a cap and gown receiving their diploma. Maybe it’s for a wedding or a much-anticipated vacation. Whatever your motivation is for setting money aside, make it more real by associating it with an image.
Another great way to remind yourself about why you’re saving is to place a photo of your saving goal on your refrigerator door or your computer or mousepad – someplace you’ll see it every day – as a way to keep the idea fresh in your mind.
Pause before you purchase
When you find yourself standing in line in a store or sitting at home late at night with your laptop open to your favorite online store, do the following before you make the purchase:
- Pause for 30 seconds
- Take a few moments to reflect on why you’re buying the item
- Ask yourself if you’re doing this out of boredom or if this is an intentional, needed purchase
Often, taking a moment to reflect is enough to stop you from buying things you don’t truly need, and give you the willpower to close your computer or walk out of the store without the item.