So, how to save money each month? Let’s Begin
You have that desire to save your income, but every time you try to save your income, you find yourself unable to.
It’s either you spend the money on less important things or just don’t know how you even spent it at all.
You have tried so hard to do away with this force that prevents you from saving. You have explored many options to fight it, but all was in vain.
Now you think there is no solution to it, you think you will have to live with it for life. Well, here is the good news, there is a solution and it’s right here at Thriven Authority.
Welcome back again to our channel and in today’s video, we will be walking you through some of proven tips we have discovered to be very effective in helping just about anyone save money.
You see, when it comes down to saving your money either in the hope of using it to purchase a house or spending it on an awesome vacation or keeping it towards your retirement, the formula is simple.
You simply spend less, try to earn more, and put the difference between the two somewhere it will grow.
Unfortunately, putting aside the cash difference isn’t so much of a feasible action in real life. it’s challenging to save, we know that.
However, there are some proven hacks around this and we will be exploring some of them in today’s topic.
Let’s get started.
Tip Number One: Take Action By Thinking Cyclically
There is one thing we all tend to do and that is thinking about better possibilities in the future.
You try to excuse yourself from saving by believing your income isn’t good enough and that once it becomes better at a certain time period, you’ll start to save even double of the current saving amount.
While this might be true, the possibility of getting a better income in the future isn’t and you are only thinking linearly about life.
Thinking about life linearly involves viewing things in terms of past and present and it might cause you to put off crucial decisions in the hope of something better later.
According to a 2014 study by Leona Tam and Utpal Dholakia published in Psychological Science, it was discovered that people who though cyclically about savings were estimated to save 74 percent more than those who thought linearly.
With a cyclic view, you see life as a string of repeating events and rather than stay optimistic about the future, you try to take action as immediate as possible.
To save more, focus on the present and view life as a string of repeating patterns where the future might turn out to be a previous occurrence.
Tip Number Two: Initiate Savings Automation
Let’s face it, one of those difficult things you experience is having to take out of your money and keep it somewhere you can’t reach.
The feeling that, after keeping the money, you might urgently need it will just keep running around in your head till you eventually give in to not saving.
If you also experience this all the time, know that you don’t have a bad habit, it’s just the normal human feedback.
In fact, a post from Harvard Business Review confirms that when you consistently and actively think about saving, you most likely won’t do it.
For this reason, it is important that you try out automated saving. Remember 401(k) in business?
Well, William, Mark, and Peter found out in 2005 that when automatically enrolled, employees have a higher change of saving for retirement.
Once you set your saving to be automatic, you tend to forget about it most times and just focus on what’s in front of you.
Initiating saving automation allows you to keep saving without having to actively thing about it.
Tip Number Three: Increase Periodic Saving Automatically
You want to save more money, right?
Then why not keep increasing the amount you save overtime. It’s called compound saving. Still remember what we call Inertia from your physics call?
Well, turns out that it applies to saving also.
You saving pattern will continue to be the same accept acted upon by a decision for change.
Let we discussed earlier, it’s hard to put your money where you can’t reach but it even becomes harder to raise your savings amount after managing to start saving.
However, when Thaler and Benartzi performed a study in the late 1990s, they were able to discover that those who enrolled for automatic 401(k) contribution raises every year almost quadrupled their saving rates.
Essentially, buy opting in for an automatic periodic saving rate increase you become able to save even more over time.
Tip Number Four: Define Realistic Saving Goals With Negative Consequences
Several things prevent people from saving and one that really renders the biggest impact is motivation.
The brain needs something that will challenge it to take action.
If motivation is put righty in place, then one can force the brain to go against its will.
Professor Dean Karlan from Yale University argued that by creating an economic penalty for the failure to save, people can consciously reach their saving goals.
This means, when you create a realistic saving goal, you should also define negative consequences you will have to face if you fail to meet the set goal.
The unwillingness of the brain to face the negative consequences will create the motivation to save as much as needed.
However, take note of the word realistic. It is important that you set goals that you can actually meet up with.
Tip Number Five: Start With Smaller Saving Goals
If you are not already used to the concept of saving, then it can be very difficult to set aside a huge amount of money either weekly or monthly for a specific purpose.
Fortunately, experts have discovered that when you break your saving goals down into smaller goals, the motive to do it increases.
In fact, a woman has stated that she was able to save over, 13 years, a total of $40,000 just by accumulating $5.
So, next time you plan to save $150 monthly, try breaking it down to $5 daily and see how efficient your saving will be.
Tip Number Six: Try Going Card-less
Cashless payment is what we call the future. however, the future isn’t good for you if it causes you to keep spending without limit.
When you are with your card, all you just have to do is insert it and that’s all, you purchase is complete.
The convenience is great; however, it opens up the possibility for you to purchase unnecessary things you never planned for.
In fact, research performed by Dilip Soman has shown that people spend more when they go out with their cards. Rather than go cashless, why not go card-less.
Simply spend only what you have on you. This way, you spend less and have more to save in the long run.
Tip Number Seven: Don’t Forget To Track Your Spending
Have you ever wondered how impactful an expense tracking app or mobile banking app can be?
Well, some people have and according to a study by the Federal Reserve, it was discovered that about 62% of consumer who checked their account balance on their phone before deciding to make a purchase ended up quitting the purchase decision.
With everything getting digital daily, you just might not know how much you’ve spent.
So, rather than just purchase as you wish, try making getting actionable insights into your account balance, see how you’ve done with your spending, and how you can change things up.
By following this and other tips, you definitely will end up becoming a pro money saver.
And that’s it for today. If you enjoyed this topic and would love to see more, then be sure to check our YouTube Channel, subscribe, turn on the notifications bell, and share videos with others.
See you in the next one.
