How to Develop a Regular Savings Habit

Putting money into your saving account on a regular basis is one of the things that can really reduce money stress for many of us ordinary, middle-income individuals. It’s what makes the holiday season fun instead of stressful, and allows us to actually have vacations, and many of the other things we want.

When we save for these things throughout the year they’re more than possible. When we don’t, we make life difficult for ourselves and can throw off our finances for coming year.

Use the following tricks to help you get into a regular savings habit.

Give Every (Saved) Dollar a Job

In other words, know exactly what you’re saving for. Whether your goal is a vacation, a new car, a house deposit, or a designer outfit – if it’s something you’re excited about, you’re more likely to save for it.

You’ll also be more motivated to forsake other, short-term, pleasures to make it possible. When you know what those savings are going to buy you, you get more satisfaction from seeing them mount up, and can clearly see why it would be a bad idea to blow them on something you don’t really need.

Consider separate digital savings ‘pots’ so you have, for example, a vacation fund, a new car fund, and a holiday fund. Put timelines on when you need to (or would like to) have enough money in these funds and work backwards from there, making sure you put enough money in each month. But be flexible if you can as well. The cost of living or changes in your own circumstances may mean you’ll have to adjust your savings goals from time to time.

Feed Your Dreams First

This is often phrased as ‘pay yourself first’ and people don’t do it because it seems illogical. We all want to fulfil our obligations (ie pay our bills) first, then save what’s left. If, however, your income is closely matched to your outgoings, you’ll find it difficult to save this way. The small amount left after meeting all your essential obligations is easy to fritter away.

If you ‘feed your dreams’ first, by setting aside a little towards each of your savings goals, you’ll have an even smaller amount left after meeting those obligations, but that’s an even smaller amount to fritter away.

Don’t cut things down to the bone. We all need a little fun money. But with careful planning a small amount of fun money can go a long way, whereas with no planning, you could end up with no money, having had no fun, in any particular month.

Ringfence Those Savings

Dipping into your savings each month because you ran out of money is a common problem. And it’s very easy to do if you don’t have a good budgeting system or if you run into unexpected expenses.

A combination of good insurance and an emergency fund can help you deal with the latter. When it comes to the former there’s no solution other than the obvious one. Make a budget. Ensure it’s realistic. Adjust your lifestyle if you need to. And stick to it.

Make Your Savings Less Accessible

We all need an easily accessible emergency fund, but for other types of savings it can be a good idea to purposely lock them away in accounts you can’t easily access. You know when the holiday season starts. It’s fine to put holiday savings into an account that won’t mature and be available to you until that happens. The same goes for other expenses you’re planning for a long way in advance, like a vacation.

As an added bonus, if you commit to saving regularly and not accessing those savings, many accounts will give you a higher rate of interest. It won’t make a huge difference on modest amounts, but every little helps. You can always factor the interest into your savings goals too, and save a little bit less each month if you know you have guaranteed interest going in.

Saving isn’t easy in the current climate. It isn’t even possible for many low-income households, and even those on a reasonable income are finding it challenging. But it is possible, if you’re able to actually get a plan in place and stick to it.

Karen Banes is a freelance writer specializing in entrepreneurship, parenting and lifestyle. She writes articles, website content, ebooks and the occasional award winning short story. Her work has appeared in a range of publications both online and off, including The Washington Post, Life Info Magazine, Transitions Abroad, Brave New Traveler, Natural Parenting Group, and Copia Magazine. Learn More About Karen