2 Quick & Easy Ways To Build Amazing Savings
You may dream about winning the lottery. You may even have a detailed plan of how you would spend your millions. But the odds are against you. For a singular $5 ticket in the Lotto Max pool, the chances of winning $15 million or more are one in 28,633,528. You’re more likely to die in a traffic accident on your way to buying a ticket according to the CBC.
When you think of it that way, you won’t make your millions through the lottery. It’s much more practical to focus on creating savings, so you can buy the things you want. Not sure where to start? You’re in the right place. Keep reading to find out two super simple ways to build up your savings.
Think about your money in terms of specific goals
When you think of your ideal money situation, what do you see? If it’s hoarding a massive pile of golden treasures like a dragon, your goal needs some tweaking. (Your ambition, on the other hand, doesn’t need any work).
Goals are at their most effective when they’re highly specific. They need enough details so that you could answer the Five Ws:
When you can answer the Five Ws successfully, you’ll have a better understanding of what you expect from your goals. You’ll know when you expect to achieve them and why you need to achieve them. This process forces you to think about your goals thoroughly, so you understand their true purpose.
Typical financial goals — things like buying a home or paying off debt — often require sacrifice. If you want to put enough savings towards your mortgage or your online payday loans, you might have to cut out expendable purchases like takeout. Or you may have to use coupons to cover variable expenses like groceries.
When you love your General Tso’s chicken or splurging on luxury condiments, this can be hard. It’s even hard when you don’t have a specific goal in mind. When you can justify these sacrifices, their absence will be a little easier to handle.
The next time you sit down to think about your goals, make sure you:
- Mindfully focus your attention on your finances
- Brainstorm the reasons why you want to change your spending habits
- Set your specific intention to a timeline
This last step is especially important. Whether it’s buying the Nintendo Switch or saving up for an all-inclusive trip this March Break, you need to assign a due date. From there, you’ll be able to figure out how much you’ll need to sacrifice to reach your target.
Use a budget to help reach your goals
A budget and a goal go together like peanut butter and jam. Like bacon and eggs. Like George and Amal. On their own, they’re good, but together they make great things.
A budget helps you flesh out the details in your goals by revealing your cash flow. It tracks every cent that comes in and out of your hands, so you have a better understanding of how you’re using your money. More importantly, it helps you identify long-term spending habits that could jeopardize your goals.
Unlike the process of making goals, the process of making a budget is boring by comparison. Very few people genuinely enjoy sitting down to review their old financial statements. You might not even know how to do this. If you aren’t sure how to make your very first budget, open a new tab to look up expert advice online.
It may take some time to find a source of information that fits with your financial situation. Discard those articles that say you can solve your debt by eliminating a daily latte. Their guidance is out of touch. If you don’t have the resources to buy a $5 latte ever day in the first place, then you can’t stop buying it.
Look for something that resonates, like the resource blog from GoDay. Their tips for avoiding debt cater to those who have limited budgets. They also complement these tips with practical savings guides, proven budgeting methods, and interesting financial trends.
Pair this new information with a money management app. It mobilizes your budget, making it easier to keep tabs on your goals wherever your day takes you. Some popular money management apps are:
- Money Manager
- The Birdy
If you don’t have the time to review and compare these on your own, don’t worry. Investopedia recently made a list of the best four budgeting apps on the market today, and their rundown of each app can help you make the big decision.
And it is a big decision. Anything to do with your finances is. Remember this the next time you wish you had more savings. Treat your finances seriously, and take care when setting goals and making budgets. When you set a deliberate intention to handle your money wisely, you’ll have better success at raking in savings.
Let this guide help you approach your finances in a new way. Set specific goals that inform your budget, and remember to use every tool available to you. Searching out help isn’t a sign of failure. It shows you can be smart with your finances.