If you're trying to cut your spending or save up for a big goal, it can be a painful process. It is tough to change longstanding habits and make saving money a part of your daily routine. Here are three tips to ease the transition to life as a saver.
1. Set up automatic deposits
Open a savings account that is separate from your main account, where your paycheck is deposited. The new account is the place where you will contribute to your goal.
Set up your main account so each week, you will automatically transfer 5 percent to 10 percent of your paycheck to the new account.
If you don't see it, you typically don't spend it. If you're attempting to sock away money for a big trip or to pay down debt, automatically deducting that money from your main savings account or checking account makes you less tempted to spend it, or to fudge the numbers.
2. Put your goals on a timeline
Match up your goals to dates on the calendar. If you're saving up $400 for a friend's wedding, how much will you need to save each week to meet the deadline?
Also, look ahead on your calendar to major events that could cause you to overspend, thus distracting you from the savings goal. Such events might include a major holiday, monthly expenses or perhaps some fun things you have planned.
Every major savings goal should have a timeline. Establish a weekly or monthly deposit amount so you will know exactly where you stand.
3. Get everyone on board
Nobody should carry the burden of saving or paying down debt by himself or herself. If your significant other, children or other family members are in the dark about what's going on financially, it can put you at risk for epic financial failure.
Kids may not understand how expensive it is to take a family trip to Disney World, but they should have a grasp on how they can contribute by taking on extra chores, etc. Getting family members on board with your plan also eases the blow of cutbacks or changes in spending.