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We have a great contributed post today on how to stop spending your savings. Let us know your thoughts in the comments!
When you’re trying to save money it’s easy to convince yourself that it’s fine to take $10 here and there if you need a bit of extra cash and it won’t affect your savings goals but if you’re doing that on a regular basis, you’ll end up taking out everything that you’ve put in and end up back where you started.
It’s always difficult to avoid treating your savings account like your normal bank account and start spending money out of it but if you’re ever going to reach your savings goals, this is a habit that you need to stop right away. I know that’s easier said than done so here are some simple ways you can do it.
When you’re trying to save money there’s always a reason for it. Whether it’s to pay for a vacation or a new car, or simply to secure your finances for retirement, it’s important that you always keep that goal in mind. If you’re about to take a bit of money out of your savings to buy something frivolous, just remind yourself why you’re doing it. Ask yourself whether you’d rather have whatever that item is, or whether you’d rather go on a great vacation with the family. You’ll soon realize that you don’t need to spend that money and it’s far more valuable to you in that savings account.
If you’re really struggling to kick the habit of spending your savings, make it impossible for yourself by using a fixed deposit. There are plenty of fixed deposit promotions out there that make it impossible for you to spend. They are high interest savings accounts that have a fixed term, some of them will let you take the money out early but if you’re really struggling, choose one that doesn’t. There’s no way that you can spend that money before you need to and you earn a higher amount of interest than you would on any other savings accounts. You usually need a fairly sizeable chunk of money (at least a few thousand) to open one of these accounts so they’re better suited to retirement savings.
Not budgeting leisure activities is one of the biggest reasons that people end up dipping into their savings. They draw up a budget that covers all of their bills and food costs and then put the rest into savings. The problem is, if you then decide that you want to go out for dinner or meet some friends for a drink, you don’t have any cash left to do it. Then you’ll inevitably dip into your savings to pay for it. The easiest way around this is to include these leisure activities in your budget so everything that you put into savings is actually surplus, not money that you want or need to spend. You can also try completely free ways of enjoying yourself to avoid spending as well.
Saving money is always a struggle, especially if your income isn’t that high, and it’s easy to start taking out what you’ve put in. The key to success is to follow these steps and break that habit.