If saving money was easy, everyone would be doing it.
The reality, as we know, is that most people spend just as much money as they earn – sometimes more.
If you’re wondering how to save money instead of spending it then take heed – there are a whole host of highly effective techniques than can help you to reach your goal…
The Buzz of Spending Money Fades Fast
The first step in saving money instead of spending it is to appreciate that the excitement of spending money soon dies off. That’s why we have to continually “stoke the fire” by spending more.
Take a look around your home and consider all the things you’ve bought in the last few years that you now barely use. Kitchen gadgets, clothes, “must have” pieces of technology. While you might have got an initial buzz from owning these items, soon enough this fades.
Wouldn’t it be better to have this money still in your bank account, rather than getting dusty at the back of your cupboard?
Appreciate the Joy of Savings
At the opposite end of the spectrum, while the pleasure of money soon dies away, saving money can be positively addictive too. Right now you may think I’m mad but bear with me…
The thing is that not spending money – and instead watching your savings account grow every month – can be a wonderful feeling. It helps you to rest easy at night, knowing that you’re protected from any surprise expenses that may crop up.
What’s more, when it comes to spending money, it’s often the bigger things that make a real, long-lasting impact on our lifestyles. As your account starts to swell, you can start to think about guilt-free vacations, a secure retirement or buying your first home.
As I slowly moved from spender to saver, I found that watching the sum of money in my account became far more enjoyable than the tat I would bring home from shopping trips, and actually found it easier and easier to save money the more this balance grew. Just try it – you might surprise yourself with how much self-discipline you really have!
Set up a Dedicated Savings Account
When it comes to saving money, leaving your “savings” in your normal bank account is a recipe for disaster. These funds aren’t “protected” so can very easily be spent. A better bet is to set up a dedicated savings account, into which you can deposit money.
If you really struggle with self discipline then you may even want to make it as difficult as possible to actually access this money – therefore minimizing the chances of you plundering it.
You could, for example, let someone else look after it for you, or ask for an account without a debit card. Some investment accounts will even lock your money away for a period of some years and won’t grant access till maturity.
Under such circumstances your savings are carefully protected from any uncontrolled spending.
Pay Yourself First
Don’t wait until a few days before you get paid to put money into savings. Doing so almost guarantees that there won’t be anything left.
Instead, try doing things in reverse. Every time you get paid ask your bank to transfer an agreed amount into your savings. Whatever remains is what you have left until payday. Remember: save then spend, don’t spend then save.
It you’re looking to figure out how to save money instead of spending it then avoiding temptation in the first place works well. Don’t tease yourself by going “window shopping”. Avoid the mall. Unsubscribe from emails about sales.
To stay strong, the first step is simply to remove yourself from situations where you might be tempted to spend money that you can’t afford.
Gamify Your Finances
“Gamification” is a word used to describe turning anything boring into a challenge – a game. There are loads of different financial challenges that you can do (see my list here) but they all revolve around turning saving into fun.
Each month you try to “beat” your “best score” by spending even less, and saving even more, than you did last time.
Even with tiny gains each month, such a challenge can quickly balloon, allowing you to save a surprising amount of money in a short space of time.
Leave the Credit Card at Home
For die-hard spenders, debt can become a way of life. If you want something badly enough, but don’t have the ready cash available, it’s all too tempting to put it on a credit card. Don’t do this – it’s a recipe for disaster.
A better bet is to leave your credit card at home so you’re never tempted to use it. There’s a full list of other ways to stop using your credit card here.
Make Instead of Buy
In today’s materialistic world the answer to most problems is simply to spend money. To fix something, repair something, show someone they love you or even just for pleasure.
You can reverse this problem by focusing instead on handicrafts. Learn how to repair damaged clothes. Use Pinterest to find gifts that you can make for next to nothing. Watch YouTube videos and figure out how to change your own oil.
All of these things can save you money, while teaching you new, useful skills along the way.
Collect Your Loose Change
When you do spend money, try spending cash instead of using your debit card. Then, when you get home, put your loose change somewhere special. We bought a big terracotta money box that you have to break with a hammer to get at the money.
Each night, just empty your loose change into the pot. You’ll barely notice the difference in your finances, but over time all those loose coins will turn into a hefty sum of money that can be paid into your savings account.
Decide on a Waiting Period
Lastly, before you spend money on anything other than the essentials, promise yourself that you’ll wait a specific period of time. Depending on your level of motivation this might be a day, a week or even a month.
For bigger purchases I often try to wait three months. In this time you’ll often find that you’ve gone off the product – so don’t end up buying it. And if you don’t go off the idea, a month or two gives you plenty of time to consider your options, compare products and find the best deal.
As you can see, when it comes to the question of how to save money and stop spending it there are a whole host of different tactics available. All you need to do is select those that are most appropriate for your situation and take action.