Nearly everyone wants to save more money, but it's more challenging than it seems. You may tell yourself you'll cut back on the morning lattes or takeout to save a few bucks each week, but it's tough to avoid the temptation to spend.
To supercharge your savings, you'll need to adjust your lifestyle to develop healthy financial habits so that saving becomes a normal part of life rather than a chore. To achieve that, there are a few mental tricks you can use that will make saving easier.
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1. Break big goals down into smaller, more manageable goals
Everyone has savings goals they want to achieve, whether it's saving for retirement, establishing an emergency fund, or socking money away for a down payment on a house. Those big goals can be intimidating, though, and if you feel overwhelmed just thinking about saving tens or even hundreds of thousands of dollars, it's tempting to give up before you make any progress.
That's why breaking your big goals into more manageable chunks can be extremely effective. Not only does it make those huge targets feel more attainable, but it also gives you a roadmap to ensure you're on track to reach those goals.
For example, say you want to save $750,000 by the time you retire. That's a huge number, and the thought of saving so much money can be daunting. But instead of only picturing your end goal, try setting monthly or weekly saving goals instead. Aim to save $500 per month, for example, or $125 per week. You can even break it down to the day, telling yourself you want to set aside just $15 per day toward your retirement fund.
Saving $15 per day is a lot more manageable than saving $750,000 over several decades, and these micro-goals can help you stay motivated to reach your big goal.
2. Establish a waiting period before you make any significant purchases
The average American spends around $5,400 per year on impulse purchases, according to deal-sharing platform Slickdeals. Retailers thrive on impulse purchases, and they're constantly trying to get you to spend more by offering limited-time deals and flash sales. When you think you only have a few hours or minutes to make a decision, you're more likely to buy something you'll end up regretting.
Before you buy anything significant, force yourself to sit through a mandatory waiting period to think it over. Be sure to set parameters, too, so that you're consistent. For example, you may tell yourself that before you spend $100 or more, you need to wait two days to think about it. Or if you're considering spending more than $500, you have to wait at least a week. You may miss out on some time-sensitive deals by doing this, but paying slightly more for something you really need is better than getting a deal on something you shouldn't have bought in the first place.
It may also be helpful to draw up a list of questions to ask yourself as you're thinking about your decision. For example, you may ask yourself how often you'll realistically use this new purchase, whether you could find a better deal on it elsewhere or during a different time of year, or whether you'll be able to resell it if it doesn't live up to your expectations. The more thought you put into your purchase, the more likely you are to only spend money on what you need and avoid wasteful impulse purchases.
3. Think of prices in terms of the number of hours you'll need to work to pay for the item
An easy way to put your spending in perspective is to think about how many hours you'll need to work in order to pay for what you buy. For example, if you earn $20 per hour and you want to buy something for $1,000, that purchase is essentially worth 50 hours of work. Thinking about your spending this way can help you determine just how much something is worth to you. If you wouldn't be willing to work 50 hours to pay for that $1,000 item, you're probably better off not buying it.
This way of thinking not only works with big purchases -- it's effective for small purchases, too. Spending $20 per day going out to lunch may not seem like a big deal, but if you're earning $20 per hour, that's an hour's worth of work for each meal. If you spend that much every day, that's roughly 30 hours' worth of work over the course of a month. If dining out is important to you, that spending may be justified. But understanding how much you're spending in relation to how much you're earning helps put things in perspective. At the very least, it can make you think before you impulsively grab takeout on the way home from work or immediately order that pair of shoes you found online.
Spending is a lot easier than saving, and it can be difficult to manage the urge to throw caution to the wind and put off saving for another day. But saving money is a mental game, and if you use these simple tricks to keep your spending under control, it will become easier to find more cash to sock away for the future.
