Saving money comes naturally to some people, but it can be a little harder for others. And even for those who it comes easier to, there can be times in our lives where we're better at stashing away cash than others.
If you have difficultly saving money, you're not alone. A recent survey showed that Americans save just 5% of their income these days, down from about 13% in the 1970s. If you're having a hard time contributing to your current savings account, or you need a jump start to get your savings going for the very first time, then consider implementing these five money-saving habits.
1. Establish a budget
One of the best things you can do for your personal finances and your savings account is to figure out where your money is going by setting up a budget. Many people hate budgets, so if you cringe when hearing you need one and immediately want to skip to the next habit, you're probably in good company.
But a budget doesn't have to be comprised of complicated spreadsheets, and you don't even have to download the latest budgeting app to get a handle on where your money is going. Even simply logging into your bank's website or app and viewing the past two months of expenses will help paint a picture of what you're spending your money on.
Maybe you'll see that all of those random trips to Target are really starting to add up, or perhaps you'll notice that you spend way more on movies or going out to dinner than you thought. The idea, here, is to find one or two areas of your spending where you can cut back -- and then direct that money into your savings account.
2. Set a savings goal
You're probably not going to get very far in your savings plan if you don't first establish what your savings goals are. Maybe you want to save $1,000 for an emergency fund. Or perhaps you already have that much, and you're working toward a goal of saving three to six months of expenses as an emergency fund.
Without a specific goal, you're much more likely to only contribute money to your savings account when it's convenient. But setting an achievable goal will help keep you motivated because you'll be able to track your progress and watch your account balance grow month after month.
The fact is, hardly anything is achieved in our lives without well-planned, specific goals. Sure, your savings goals may shift a bit, and you should feel free to edit them as needed. But for you to be successful in saving money, you need to write down how much you want to have in your account by a specific date -- and then go about taking the necessary steps to make that happen.
3. Automate your savings
This may be one of the easiest ways to jump-start your savings, and it only takes a few minutes to do. Go to your bank's app or website and find the option to set up a recurring transfer of a specific amount of money from your checking account to your savings account.
It's a good idea to set these up for specific times of the month where you know you'll have the most money, like paydays or a few days after, so you know you can steal that money away from yourself before you spend it. I've found that once my money gets moved from my checking account to my savings account, it creates a small psychological barrier that makes me less apt to spend the money than if it were still in my checking account.
Perhaps an even easier way to trick yourself into saving is by seeing if your bank gives you the option to make automatic deposits to your savings account every time you use your debit card. For example, Wells Fargo allows its customers to sign up for a feature that transfers $1 from their checking account to their savings account every time they make a purchase with a debit card, pay bills online through its website, or make an automatic payment from their checking account.
No matter which way you set up your savings plan, make sure it's automatic. We're all creatures of habit, and once we've set something into motion, it's going to be harder to stop it. You can use that trait to your advantage by automating savings and going about your business.
4. Check in on your budget to see if it's working
While you can easily automate how much money is directed into your savings account, you can't automate your entire budget. That's why it's important to periodically check your spending habits and your revisit budget to see if you're still adhering to your savings plan.
You don't have to do this on a weekly basis, but checking your spending each month for the first few months of your new budget is a good idea. After that, you may be able to look at your spending habits each quarter. You may find that new expenses have crept into your budget, or that (hopefully!) there are other unnecessary expenses you can cut out and instead direct the money toward building more savings.
Don't get discouraged if you've blown your budget entirely, or if you've even had to take money out of your savings account for unexpected expenses. No budget will be perfect the first time, that's why you need to keep tabs on it and make necessary adjustments.
5. Look out for great deals, both large and small
This one might seem obvious, but one tried and true characteristic of savers is to be constantly on the lookout for good deals. Saving money has a lot to do with not wanting to easily part with your dollars. It's not about hoarding your cash, but rather understanding how hard you work for each dollar and using that to guide all of your purchases.
You can do this for both large and small purchases, and especially ones that are recurring. For example, I recently signed my wife and I up for smartphone coverage through an inexpensive mobile virtual network operator (MVNO) at a fraction of the cost of going through a brand-name carrier, with nearly all of the same features.
Finding great deals on recurring monthly expenses are even better than one-time deals because you're lowering your overall expenses every single month, which can help keep more money in your pocket for years to come.
Of course, saving money on significant expenses is important, too. Whether you're buying a car or a new dryer, make sure you're setting a firm spending limit and sticking to it. When I bought a used car last year, I did a lot of pricing research ahead of time and went into the negotiating process with a good idea of the vehicle's value and what I wanted to pay for it. I stuck to my budget when the salesperson wanted me to give in to a higher price, and I ended up with an excellent car for a good price -- all because I was willing to walk away if it was over what I wanted to spend.
Stick with it
Many people experience ups and downs in their finances, and unexpected expenses pop up for all of us. This can make adding money to your savings account seem impossible, especially if you're just getting started in the process.
Don't get discouraged if you miss your own goals, or if you're only able to set aside a little bit of money each month. Getting into the habit of saving is one of the most important things you can do for your finances, and as you build your savings muscle memory, it'll become easier and easier to do. Stick with your savings plan for long enough, and your dedication will surely pay off.