personal finances — June 15, 2016

How to Start Saving Part III

by Susannah McQuitty

Congratulations, ladies and gents: We’re halfway through our Budgeting Bootcamp! Hopefully you’ve learned a lot about your spending habits and have begun to look for ways to save money.

Here’s a recap of last week:Lifting weights and saving money icon

  1. Don’t overspend your budget
  2. Recognize ways you might rationalize overspending
  3. Set new spending goals to save money for the things you really want

We’ve got two weeks left. It’s time to take a closer look at this saving business.

Week 3: Spend Less, Save More

Our main goal for this week? Underspend your budget.

Last week, our main objective was to spend no more than our budget allowed. If you allowed yourself $50 for Wants, you couldn’t spend more than $50. This week, if our budget says $50, we want to spend less than that.

This week, we’re going to target underspending on Wants and Comforts. Don’t worry about trying to go cheap on Survival. We’ll talk about how to save money from the necessities like groceries, bills, and gas in Week 4.

For now, it’s time to start trading in some immediate pleasures for long-term gain.

Steps to Save by Underspending

Thumbs up to saving money on caffeine boosts by drinking office coffee.1. Break your budget into daily spending limits

While last week you had a budget that gave you a lump of money to spend on Wants, Needs, and Survival, this week you’re going to break that budget into tiny daily spending limits.

2. Give up at least one thing that is within your budget every day.

Okay, folks: This may hurt a little, but that’s okay. Being able to say no to a purchase even when you can afford it is a big step in the right direction.

First, target purchases that only last for the short term. These can fall into both the Wants and Comforts categories, so watch out!

  • See a Snickers in the checkout line? Your Wants budget says you can afford it, but you can also say no.
  • That cool new organic, calorie-efficient, no-sugar-added, 1-serving bag of coconut chips you’ve been eating after lunch? It’s well within the Comforts budget, but again, you can say no.

Next, think twice about even long-term purchases. Sure, those portable hammocks are cool, but how often would you use one?

Use the walk-away trick on these bad boys: Even if you can technically afford something, leave it and come back tomorrow. You’ll be surprised at what a cooling-off period can do to help you realize your priorities!

3. Get emotional about saving money

Quote on coffee mug with dollar bills: “It’s not your salary that makes you rich: it’s your spending habits.” Charles A Jaffe.Now, I’m not asking you to break down sobbing in front of confused store employees.

The truth is, for many of us, spending habits are driven by mood. Usually, we have positive associations with spending money and negative associations with denying ourselves by saving, and our attitudes should be the exact opposite.

It’s high time to start building appropriate emotional responses to the way we use money!

Here are some ways to do just that:

  • Pay with cash. It hurts a lot more to break a 20 than to swipe a card.
  • Remember your long-term goals. That jacket you saw last week? You’ll get it sooner if you give up a couple Wants or Comforts this week.
  • Watch your balance with online banking, especially when you have more money than usual. When I have a few hundred bucks in my account, I feel invincible. Watching that balance drop reminds me that a few hundred only goes so far—and it’s not a bottomless supply.
  • Keep saving receipts. You have plenty of experience with this tactic by now! The more receipts accumulate in your wallet, the more you realize how much you’ve spent—and that doesn’t feel as good anymore.

4. Put savings out of reach

Saving dollar bills and spare change is a great idea.So you’ve said no to some things and have begun to feel better when you save than when you spend. That’s great! But be careful; sometimes that “I’ve been good this week!” feeling can lead to making the “I’ve said ‘no’ a lot, so I should treat myself!” mistake.

Gather what you saved every day and set it aside. Pay in cash, put your savings in a jar or an old mug, and hide that money under your bed. As a rule, you want to keep large amounts of savings in the bank, but don’t worry about opening a savings account yet.

The point is to get the money you didn’t spend away from your wallet and out of your reach. Since we’ve already broken your weekly budget into a daily budget, you shouldn’t be worried about not having enough money tomorrow.

At the End of the Week

Every day you gave up something. Every day, you saved and took controlling your spending to the next level.

Time to count up the rewards and plan for next week—the last week in our Budget Bootcamp.

Take out that mug, box, coffee tin, whatever you hid your money in, and count it all up. Don’t stress if it’s not as much as you thought (I’m always convinced there must be at least half a million in my turtle mug because of everything I feel like I’ve had to give up).

Subtract the amount you saved from your Week 3 budget and voila: You’ve got your Week 4 budget!
Now put all that money back under your bed: You don’t get it back just yet.

Next Week: The Final Cutdown

Here’s the last step in cutting down your spending so you have money to put toward a savings account! We’re going to target saving on Survival items like food, clothes, gas, and bills, and talk about the long term after our Budget Bootcamp is over.

After all, it’s high time all this hard work paid off.




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