3 Steps to Easily Improve Your Savings Strategy
Another installment of Money Monday is here and today we’re diving into one of my favorite financial topics…savings! I don’t know about you but I have some major life goals and the reality of it is that without a substantial savings strategy and plan in place, those goals truly will not be attainable.
We’ve talked about a few different elements of saving throughout this series so far, like 5 simple things you can cut to save money. As growing my savings substantially becomes more and more of a priority, I’ve really dived into easy ways that help make the process not only more meaningful, but successful.
This 3-step process is easy for anyone to implement no matter their financial situation or what their goals are. Whether you are looking to buy a house, pay off loans quicker, buy a new car, travel more, or just save money to save for the future, your savings strategy will have a whole new life and meaning with this easy process.
So without further ado, here’s my 3-step process to easily improve your savings strategy!
STEP #1: FIND YOUR WHY
The first and most important step is to figure out your why. Is there something specific you are wanting to save for? Are you trying to pay off loans or get out of debt more quickly? Are you looking to make a big life purchase or making a big move? Figuring out your why, in my opinion, is the most important and necessary step.
If there is no reasoning or motivation behind your savings strategy, you probably won’t be as motivated to save. I think it’s important to also dig a little deeper than just saying “I want to buy a house” or “I want to travel the world.” These phrases are your starting point and base, you why goes a step further. Maybe you want to travel more because you love exploring new cultures and creating memories to last a lifetime. Or perhaps you want to buy a house because you want to build roots and start a family with your significant other. Taking your goal and putting meaning behind it adds this extra layer of motivation to save.
This isn’t something I personally do but have heard that it works well for others, but you could name your savings account your why as even another layer of motivation. Instead of it being this gazillion long letters & numbers combination, rename it “FUTURE HOME” or “TRAVELING THE WORLD.” I bet you’ll be much less inclined to take money from that account for an extra latte or lunch out during the workweek seeing that!
STEP #2: BUDGET EVERY SINGLE DOLLAR
I’ve talked about how I account for every single dollar of income and give it a purpose each month and y’all, it’s truly life changing! Not only does it make you feel like a budgeting boss, but by giving every dollar a responsibility and job, those one-off impulse purchases become a thing of the past as you watch you savings grow. That’s a win-win in my book!
Now, obviously I think it’s important to have some sort of emergency fund each month because things do happen that we unfortunately cannot budget for. I also think it’s important to treat ourselves from time to time, like a weekly coffee shop visit. Add these things to your monthly budget as their own line item and expense so that you can be sure you are accounting for them and don’t get into financial hiccup.
Adding your why, that thing you’re saving for, to your budget is also a smart thing to do, too. Have a goal in mind of how much you want to contribute to that savings account each month. I even like to take it a step further, almost like a game, and see how much over my monthly savings goal I can add. Whether it’s an extra $5, $50 or $500, you’ll feel so accomplished adding more towards that why goal and knowing that your savings strategy is on the right track.
STEP #3: TRACK YOUR SAVINGS PROGRESS
So you’ve figured out your why and accounted for every single dollar, now it’s time to reflect and track your progress. I find it so incredibly rewarding to see how much I’ve saved each month towards that life goal. As that value in my savings account grows and grows, it gives me even more motivation to keep saving and really challenge myself to go the extra mile to do so.
For me, I just use a spreadsheet to track all of my personal finances. It’s what works best for me and allows me to see everything as a whole, and filter things as I see fit. When tracking your progress, find what works best for you. Maybe an app that gives you notifications makes you more successful and motivated. Give it a go!
There you have it, my simple 3-step process to improve your savings strategy. Do any of these resonate with you? Do you have a savings strategy in place? If so, share below in the comments and let’s all be successful savers!