There was a point in life when I wasn't doing such a great job on the savings front. I was juggling a host of new expenses that came with having kids (think outrageously high child care costs), and I was also grappling with a variable income as a result of being self-employed. During that time, I wasn't doing a great job of adding to my near-term savings, and I wasn't making the progress I wanted on my retirement savings, either.
Thankfully, a few tweaks turned things around for the better and got my savings back on track, so much so that a year after implementing them, I had managed to save twice as much as I did the year before. These are the tricks that really worked for me -- and can easily work for you, too.
1. I put savings at the top of my budget
Having a household budget helps me keep track of my spending and make adjustments to my expenses as needed. But a while back, I realized one important thing was missing from my budget -- a line item for savings.
Once this hit me, I reordered that budget so that savings came first, and from there, I worked in my remaining expenses. Doing so helped me realize that to meet the goals I'd set for myself, I'd need to cut back on some non-essential spending. That meant going out to eat a little less frequently, spending less on entertainment, and taking low-cost vacations instead of springing for nicer hotels. But once I made those changes, I learned to not only live with them, but live happily with them, especially with the knowledge that I was helping my savings grow the way I wanted them to.
2. I automated the process
Being self-employed means I can't sign up for a company 401(k) and have retirement plan contributions deducted from my paycheck. But I still managed to automate my savings, and doing so has helped me stay on track.
Each month, I have a portion of money from my checking account get transferred into savings automatically. From there, I can keep that money in regular savings, or I can send it to my retirement plan. The key, however, is that it leaves my checking account before I get a chance to spend it.
Anyone who's struggled with self-control in the past would be wise to take advantage of automated savings. Many IRAs have this option, too, so even if you don't have access to a 401(k) through work, you can still set yourself up to send money from each paycheck to a retirement plan automatically.
3. I stopped wasting money on impulse buys
Like many consumers, I tend to have a hard time saying no to a bargain. But once I realized I was spending too much money on unplanned purchases, I knew some changes were in order.
To this end, I instituted the 24-hour rule, which goes as follows: When I'm tempted to buy something I wasn't intending to purchase, I must wait a full 24 hours to go through with it. And to be clear, I'm not talking about grabbing one extra $3 bag of chips off the shelf at the supermarket, or buying an extra $5 package of socks for my kids because I see it on sale. I'm talking about substantial purchases that clearly aren't necessities (in my world, snacks are). But since implementing that rule, I've avoided spending money by coming to my senses and realizing I can do without most of the things I've been tempted by.
If saving money were an easy thing to do, more of us would do it -- and do it well. But the reality is that saving money is hard, as evidenced by the fact that 39% of Americans reportedly don't have enough cash reserves to cover an unplanned $400 expense. If your savings need a pick-me-up, give the above tricks a go. They could really make a world of a difference.