Spending money is really fun. The shoes, the clothes, the food oh my!
But saving money can lead to even more fun, especially when you're saving for something you don't usually get, like a European vacation, a brand new computer, or a monster-sized HD TV.
Here are a few ways that you can truly be successful at turning the dreams you're saving for into reality.
1. Rely on technology.
Consider switching to paperless billing using a free account management service, like Manilla.com. It makes it much easier to track your spending, manage your savings, and know exactly where your money is going each week.
Managing your money online or via mobile apps is more efficient than sorting through stacks of paper mail. It will allow you to spend less time focusing on saving and more time concentrating on what you're going to do with all your saved cash.
2. Break it down.
A massive savings goal is like a big, expensive vacation to Paris and can be a little scary when it comes to strategizing how to save. One way to make a bigger savings goal more manageable is by breaking it down into smaller steps. First, remind yourself of the goal every day by carrying around a picture that relates to it (like a photo of the Eiffel Tower). Then, use a spreadsheet to track your savings progress. Finally, identify places in your budget where you can cut back and save more.
3. Communicate, communicate, communicate.
If you're working with a spouse or partner to save toward a particular goal, it's important to talk about it every step of the way. Because, like with any financial decision you make with your partner, communication is key. One roadblock to maintaining a budget that allows you to save toward a goal is disagreement with your partner on the subject of money.
Perhaps what you consider to be a want is a need for your spouse or partner. When it comes to making financial decisions together, it's essential that both you and your partner are involved in all stages of creating and maintaining your household finances. If you can't agree on a budget, consider seeking advice from a professional financial adviser.
4. Try the Island Approach.
If you're worried that overspending will prevent you from reaching your savings goals, try using the Island Approach, a theory designed by credit card comparison website Card Hub that suggests that consumers should use different credit cards to meet each one of her specific financial needs. By doing this, you'll have a better perspective of your finances and, therefore, a better perception of your savings goals.
The most important savings goal is to establish an emergency fund to act as a safety net that can help you avoid debt. Make affordable, automatic deposits each month with an end goal of having a year worth of after-tax salary saved.
5. Don't discount even the smallest amounts.
When you make a purchase at your local convenience store or pharmacy, the trick is to use cash, never use exact change, and then save the difference.