Are you a spender or a saver?
Many people spend money in different ways. Some only spend a little, yet others (over half of Americans) spend freely with little concern about debt.
I would like to think I’m somewhere in the middle. I don’t carry credit card debt and have over six months of an emergency fund, but I do believe in the old Greek saying that translates to everything in moderation, even saving money.
Obviously, you can’t save everything you make, or you wouldn’t be able to pay your bills. But saving money often becomes a problem, especially if you are in debt.
Yes, saving money is difficult. Yet, you will find once you start training yourself to save, you will learn to like it and keep your money by creating separate sinking funds for everything.
It will feel great when Christmas rolls around and you have money for gifts this year!
Saving Money When You Have Debt:
According to CNBC.com the average American family has $8,377 in credit card debt. However, spending freely can dig you deep into a debt ditch. Nonetheless, credit cards allow us to spend without thinking about actually having to pay the bill (and interest) at a later date.
For the many families that have debt, learning how to save is essential. You can start saving money and pay down your debt at the same time. I recommend keeping and emergency fund so you do not fall deeper into debt if an emergency strikes.
Nonetheless, if spending money is your past-time, it is possible to change your ways and start saving more.
Suggested Reading: Are You Drowning in Debt? Learn How to Come up for Air
Train Your Brain to Save
Your brain is like a muscle. You can learn to curb your bad habits, with new healthy habits. If you love to spend, you can train yourself to become a saver. It just takes a little practice. Once you start seeing results, you will want to save more.
The trick is to learn how to budget and live within your means.
Moreover, track your spending habits and do not spend more than you bring in. For example, if you make $900 every two weeks and your monthly bills are $1300, you need to learn to spend less than $1800 monthly by using the $1300 for bills and the $500 left for your savings accounts, emergency fund, and retirement.
You can even set aside a little splurge fund for going out to eat once in a while or buying a want once a pay period so you do not feel deprived.
You are going to trick yourself here and retrain your brain to hold on to money instead of things.
Why All the Stuff?
One thing I want you to ask yourself is are you good enough? Can you be happy without all of your stuff?
The answer to both of these questions is yes! Research shows stuff does not make us happy and not being able to pay your bills creates unnecessary stress in your life.
Suggested Reading: Useful Tips to Declutter Your Home and Gain Perspective
There are six keys to success in learning to become a saver. Start practicing the six steps below and after time, saving will become automatic.
6 Key Steps to Becoming a Saver
1. Budget – I cannot stress enough how important it is to create a budget. However, it is often difficult to look at the reality of your money, but you must know how much your living and needed expenses total, so you can set aside money to pay bills and still have some money left over to live life and save.
2. Save 10% Automatically – One way to trick yourself into becoming a saver is to have 10% of your check taken out automatically and put into a savings account. After a while, you will not even realize the money is gone.
I used to put money in my retirement fund automatically. Year after year, I felt like my net paycheck was what I was making and I used that amount to budget, even though I technically made more but put a percent into my 403(b) before taxes.
3. Track Your Spending – Try tracking your spending for a week or month. Try using a spending journal to track your spending habits. Identify exactly where your money is going.
4. Cut up the Cards – If you are an avid spender and are trying to learn how to become a saver, get rid of your credit cards. Research shows the average person spends more when using a credit card. The key to owning a credit card is self-discipline. If you are lacking in that area, then, for now, say goodbye.
5. Use Lists When Shopping – Using a list and sticking to it sounds easy; however, advertisers know exactly what they are doing when you enter a store. Ever wonder why the milk is all the way in the back of the store? You end up passing everything along the way, and don’t even get me started if you have kids in the cart eyeing and begging for everything! Try finding time to grocery shop by yourself when your husband is home.
It also helps to stick to your list, meal plan, and only go grocery shopping twice a month. In this way, you are not tempted to buy more when making more frequent trips to the store.
Suggested Reading: 7 Money-Saving Secrets to Dramatically Slash Your Grocery Bill
6. Use Separate Accounts – Set up accounts with your bank and automatically put an allotted amount of money in each account. Determine the amount you need for bills and set this aside in your checking account so your bills will be paid on time.
Research shows your brain has to make a second decision to take money out of the “fund” account. It is easier to delay the desire to spend money in these accounts by simply allocating your money to designated funds. Also, these funds should not be attached to your debit card.
Some ideas for savings funds accounts are as follows:
- Christmas fund
- Vacation fund
- Emergency fund
You are essentially tricking yourself into saving. Nonetheless, you can do the same thing with a cash envelope system, but of course, you have easier access to the money. Furthermore, this is why I recommend putting your money in a trusted bank with separate designated accounts.
How to Become a Saver Conclusion…
If you are interested in changing your spending habits, consider the list above. Budgeting your money and saving at least 10% of your paycheck is the first step towards your saving habit.
Also, track your spending and get rid of those credit cards unless you have amazing willpower. Don’t forget to use separate accounts for your savings funds and make sure you have your shopping list handy when you enter a store.
You will be on track to saving and living and amazing debt-free life!
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What kind of spender/saver are you? Please leave me a comment! I would love to hear from you!
Take care – Sarah
6 Comments on How to Become a Saver in 6 Easy Steps
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Do you have any suggestions on how people who are barely making ends meet I can save money? Always just Instagram but if you don’t have enough money coming in to cover all of your monthly expenses like housing and food how are you supposed to save for an emergency ?
Thank you for your comment, Megan. I feel honored that you would come to me. It is true this post was meant for people who are overspending, but I truly feel for people in a situation that cannot afford their needs and therefore are left unable to save. I am going to direct you to some older post that may help you and want to let you know, you have inspired me to write a post about this very situation. Please be patient with me as I gather more information in the next few weeks. All the best – Sarah
Please check out the following posts:
$40 Meal Plan Your Family Will Love (this is for two weeks of dinners)
Side Hustles: My List of 75 Ways to Earn Extra Money
Good Old Dave Ramsey: Financial Peace is Within Your Reach
7 Money-Saving Secrets to Dramatically Slash Your Grocery Bill
I shared this post with my husband during a long car ride today and it has inspired us to make some changes in how we manage our finances.
We like to use credit cards because they generate a lot of free dollars over the course of the year in points. It works well since we pay the balance off each month in full. We like the idea of having separate accounts to better manage needs and wants. We currently have two different credit cards, so we have decided to use one for all expenses that are considered needs (car insurance, daycare, utilities, etc). The other will be used for wants (dining out, movies, clothes, etc). We will then use one of our checking accounts to pay all of charges on the “needs” credit cards plus any additional “needs” expenses that cannot be charged like our mortgage. A second checking account will be used to pay the “wants” credit card.
We will continue to keep a third account for our emergency fund and a fourth account for vacation expenses. Each month we will distribute our paychecks into each account according to our budget.
Sorry for the lengthy reply, but we are excited about trying this out. We are always looking for better ways to manage our money. Thanks for the inspiration!
Thank you so much for your comment, Andrea! I am glad you found the post helpful and I love your ideas. If you pay your credit card off every month, then why not take advantage of all the perks! I love how you divided your spending into “needs” versus “wants” and will use different cards for each category. Take care!
I definitely needed this post! I have a little spending habit so it’s great hearing ways to save and cut back my costs.
Thank you, Sara! So glad to help! Thanks for the visit!