Saving. Budgeting. Cutting down expenses.
Do these words evoke certain emotions in you? You’re not alone! Utter them and chances are you’ll be met with reactions that include nervous laughter, sheepish glances, or defensive declarations that life’s for the living or YOLO.
The good news is, saving does not have to be uncomfortable or anxiety-inducing!
We get it. The idea of saving may bring to mind the thought of giving something up, restraining yourself, or just enjoying life a little less.
However, when saving is done right, this doesn’t have to be the case. It’s possible to indulge in all that you love, while saving up for your future and growing your wealth!
Here are 4 tips to help you save right.
1. Be realistic
Take a minute to recall some of the roadblocks you’ve encountered.
Have your previous attempts to save been thwarted by a sneaky enemy called “unrealistic expectations”?
While being zealous and determined is great, having overly ambitious goals may set you up for falling short. For example, trying to limit yourself to a fixed or overly stringent amount without factoring in allowances for ad-hoc necessities or accidents can easily lead to a burst budget.
If this sounds like you, don’t be discouraged to continue saving. Just be sure to include a little margin for unexpected circumstances that may require some spending.
And, if you manage to coast through a month without unexpected costs, it would mean a bonus amount going towards your savings!
2. Set an allowance for emotional spending
Do you put aside a small amount to reward yourself for hitting certain saving milestones? That’s great!
Did you know that setting up a “bad mood fund” can help you save more as well?
It may sound counterintuitive to set aside more money to spend, but hear us out!
Studies have shown that spending can be used as an emotional crutch. What this means is people spend when they feel bummed out to cheer themselves up or to regain a sense of control. That’s perfectly normal and an understandable way of dealing with stress. However, without a budget for emotional spending, it can easily eat into your hard-earned savings!
That’s why it’s key to set boundaries. Set up a fixed amount to be spent when you feel sad or mad, and spend it guilt-free when you do! The catch – be sure to stick to the budget and spend no more than the sum allocated!
3. Create a path of least AND most resistance
Did you know that it takes about 18 to 21 days to form a new habit?
The beginning may be the most challenging, so it’s key to eliminate as many potential hurdles as possible! For example, automate your savings to another account when your paycheck comes in. This way, you’ll naturally save before you spend.
On the other hand, it helps to add as many obstacles that slow down the process of spending. Compulsive shopper? Hide your online shopping apps in an obscure folder on your phone (and don’t use the search function!) Avoid saving credit card or payment details on all platforms to create that hassle of keying in your data manually.
The extra time needed for spending gives you the chance to ask yourself an all-important question – “do I really need this?”
4. Know that no amount is too small
At the end of the day, every little success should be celebrated. No amount of money saved is too small. Got some spare change? Put it away to be saved! The pennies do add up to a more significant sum.
That’s why it literally pays to save little by little.
Want to save easily without the trouble of sorting out coins and notes? Try AutoInvest!
AutoInvest helps you to put aside an amount of your choice ($1, $2, $5) when you book a grab ride, order your meals, or shop with Grab. This money is automatically added to a balanced portfolio with potential returns of 1.18% p.a.*
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*Projected yield and returns are not guaranteed or protected
