Are you trying to save money as a New Year’s resolution? Sometimes it can be hard if you aren’t used to saving money. Even though it can be tough, it is possible to retrain your brain to think like a saver. The beginning of the new year is a great time to look over these 8 steps to think like a saver. I’ve followed these 8 steps over the last 5 years, and it has greatly helped me to spend less and save more. These steps have also helped me to be happier.
I originally posted these steps to be implemented over a period of 8 weeks in a series called Think Like a Saver Thursday. It was such a popular series that I wanted to put it in one post that would help you jumpstart any financial goals you have for the new year. These steps are best if you do one each week, or every few days.
Related Post: 10 Money Rules to Live By
Identify your goal and continue to remind yourself of it. Post it somewhere around the house and think of it often, especially when tempted to spend money.
Think to yourself for a moment about why you want to save money.
Are you saving money to pay off loans like us? Or do you have a bunch of credit card debt? Are you trying to save for retirement, a new car, or a new house? Or do you just want more wiggle room in your budget?
Once you identify your goal, you can use this to motivate you on your journey to saving.
Learn to be confident in your money-saving and spending habits. If you aren’t confident in the way you are saving money, it will be impossible to go on to the next step.
It can be hard to be honest with your friends and family about saving money, and before you open up to the world about your money saving habits, you need to make sure you are confident. If you don’t believe in yourself and your goals, who else will? This is good advice in general, not just for your money habits.
Be honest with your friends and family about your financial goals.
A couple of years ago, I wrote a post challenging myself to be more honest with my friends and family about my finances. I found that once I told people the truth about not being able to (or not wanting to) buy certain things, a lot of them shared that they shouldn’t be spending money either. The truth is that we end up feeling pressured to buy things we don’t need when we aren’t completely honest about our finances with friends and family.
Identify your spending weaknesses and be aware of them.
Sit down and write out a list of all the ways you feel tempted to spend money. This doesn’t have to take a lot of time. You can even start a running list on your phone if you don’t have time to sit down with pen and paper.
Start out very general and then move onto a specific list of things that tempt you to spend money.
There is no right or wrong way to do this. As long as you are identifying a weakness, you are on the right track. And don’t feel like you have to finish the list today. This can be an evolving list. I know my weaknesses change with the seasons, sometimes with the hour.
Make a list of ways to overcome your spending weaknesses.
The next step to think like a saver is to come up with alternatives to your weaknesses. The key here is to come up with alternatives that still allow you to enjoy yourself. I don’t like going cold turkey on anything, not even spending. The truth is that you will always need to spend a little bit of money, so don’t deprive yourself, just find better ways to spend your money. You also need to make sure that your alternatives are enjoyable to you. Not everyone will enjoy the same types of alternatives.Don't deprive yourself, just find better ways to spend your money. Click To Tweet
Decide whether to spend time or money on certain items.
We’ve all heard the expression, “time is money”. This is very true for people in the work force, especially those who bill by the hour. You can always get more money, but you can’t get more time. Time is so valuable because it is a fleeting thing that we have less of each day while money is something we can get more of if we are willing to swap our time for it.
When should you spend time saving money and when should you spend money to save time? This is the ultimate question for all busy people on a budget. What is the answer to this time versus money dilemma?
Read more about this here.
Bottom line: there is no right or wrong answer to the time versus money question. It is all on an individual basis. Try to find some time this week to do an inventory of your time and money. Make sure you aren’t wasting time to save money or wasting money to save time. This is a balancing act and your goal should be to save time and money while enjoying the process.
Make a budget.
One of my favorite money saving websites, WiseBread, has an awesome post on budgeting where they state that if budgeting isn’t fun, you’re doing it wrong. I’m not sure I’d say that budgeting is my top pick for a fun activity, but I do agree that it doesn’t have to be torture. For most of us budgeting is the wake up call that we need in order to get our finances together.
Here are a few budgets that you may like:
Simple family budget by Budget Worksheets
Pretty printable by SissyPrint
Design your own budget on Excel by makeusof
Don’t worry about sticking to the budget just yet! Right now you need to be more mindful of where your money is going.
Stick to your budget!
Revisit the first 6 steps. There is a reason I saved budgeting for the last step. If you were to dive right into a budget without the right motivation, it would be much harder to stick to it.
Try to find the positive points in your budget and celebrate them. If you are under budget on an item, let yourself feel good about it and use that extra money towards your financial goals instead of allowing yourself more money on another item.
Don’t beat yourself up over your mistakes. Just because you mess up once doesn’t mean you have to throw in the towel. Learn from your mistakes so you don’t keep making them.
All you really need are those three tips! It’s that simple! Now go off and try your best to stick with your budget this month. Next week I’ll wrap up the Think Like a Saver series and give you a few extra tips to save more money.
You can do it!
Keep going strong with these 8 tips! I know you can do it. I personally can attest that these steps have helped me spend less, which in turn helps us save more.
My final tip is to find a financial planner who can take your saving to the next level. I didn’t put this on the list because it isn’t necessary for training your brain to think like a saver. However, it is an important step to take once you’ve curbed your spending enough to have savings. It’s important to share your finances with someone who can keep your money safe. I’m planning to write a post on how to find a good financial planner that won’t sell you things you don’t need. Best advice: find someone reputable who isn’t trying to tell you insurance. You want their main goal to be your money, not selling products.
Did I miss anything? What other tips do you follow for spending less and saving more?