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This is a collaborative post. All opinions are my own.
I have become one of those weird people who enjoys saving money and talking about it. Who wants to hang out?? I'm sooo much fun! ;D
To spare my friends, I'm taking it to the internet where I can post whatever I want, and you're not obligated to read it (but maybe you're secretly interested in money tips too?). What has made this fun for me is thinking of our finances like a strategy game...trying different things to see how much we can save without feeling deprived. The last part is key, because in order to stay motivated, it has to feel like we're still living a good life now instead of sacrificing everything we enjoy for the sake of a better future. It's like how some people never travel because they're waiting for retirement, then by the time they finally retire they're too old and sick to do the things they dreamed of. We don't want that. But at the same time we don't want to live selfishly, doing whatever we want and buying things on impulse, at the expense of our future selves. After all, we also want to create a healthy financial future for our family. We want to experience awesome things now, while we're young and our kids are little...but also set ourselves up to keep doing awesome things in retirement. Oh, and preferably we'd like that retirement to be before we get too old (yeah, I know, we want to have our cake and eat it too). Here are five things that have helped us to increase our savings without feeling deprived.
Source: Pixabay
1. Find your why.
You're never going to stick to an aggressive savings plan if you don't know why you're doing it. I'm actually grateful (in some ways) that the housing prices in Seattle kept climbing while we lived there so it always felt out of reach. Wanting to buy a house kept us diligent about saving during that time when we were both working. Otherwise I think we might have wasted a lot more money on clothes and eating out. Whether your goal is saving for a house, paying off debt, or early retirement, having a specific reason for saving will keep you motivated and on track.
2. Figure out what brings you joy.
It sounds cliché, but the Marie Kondo method works just as well for your expenses as it does for your closet. Go through your spending from the last few months and think about what purchases actually brought you joy. Obviously some joyless things are necessary, like buying toilet paper and paying for electricity. But for your discretionary spending, what was actually worth the money in hindsight? Once you've narrowed that down, structure your budget so it matches those priorities. Maybe treating yourself to lattes a couples times a week actually does bring you $40 worth of joy. If so, you don't have to cut it out. Personal finance is personal. We all have things that are worthwhile to us, and things that we don't really care about. If you can find some things to cut out that you won't really miss, then you can still enjoy little splurges, guilt-free.
3. Do a spending freeze.
Trying to cut something out forever can feel very daunting and impossible. Instead, try a spending freeze for a limited amount of time. It's kind of like Whole 30...you're more likely to stick to a strict diet if you know it's only for one month. And it helps to have other people doing it at the same time for moral support. A strict budget is similar! Make it like a game, see if you can get some friends to do it with you, and you might even have fun. Pick a month, and challenge yourself to spend nothing on purchases that aren't necessities...no home decor, no new clothes, no duplicates of items you already own. By going cold turkey for a short period of time, you can reset your spending habits. And you might be surprised by how much you save in that one month!
4. Create a budget.
A goal without a plan is just a wish. In order to increase your savings, you have to create a budget to control and direct your spending. You can download a budgeting app to make it simpler for you, create an Excel spreadsheet, or work it out with a good old-fashioned pen and paper...whatever method works for you, just do it. Make sure your budget allocates every dollar of income...starting with how much you're going to put into savings every month (aka pay yourself first)! Then track the rest of your spending throughout the month, checking in as you go to make sure you're sticking to your plan.
5. Seek financial help.
As with so many things in life...if you're struggling, don't do it alone. Speak to friends or family members who are better with money than you are, and ask for their advice and support. They could have ideas that you haven't thought of (for example, now could be a good time to refinance your house with the extremely low mortgage rates). A conversation with an accountant could be very helpful and insightful, especially if you own investment properties or a small business. And of course, you can find a lot of information online too. Use websites such as Rate Rush for advice on all kinds of money-related topics.
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