As we move through the fourth month of the year, it’s the perfect time to re-evaluate how we’re doing with our money goals so far. Saving up money is a goal that most of us have. (And if we don’t, we should). But putting aside money for savings is a real challenge for the majority of us. Either we have too little saved or not at all. Am I right?
Truth be told, we often treat saving as optional, negotiable or non-essential. Don’t we? But we know that is not the case. Having a savings cushion really IS a necessity. Living without savings is a sure recipe for falling into debt.
The great news is, saving is a habit that can be DEVELOPED through practice.
The way to ensure that you save money every pay period, is to add in your savings goal to your budget. When we do our budgets, we typically include expenses that we must pay to someone else. But we don’t include what we must pay to OURSELVES. Savings are what we pay to ourselves.
The bottom line is that there is no lasting financial success without the use of a budget. Visually seeing what you spend and earn shows you the reality of your actual situation. Budgets help to clarify our expenses. In other words, they detail the absolute necessities that MUST be paid to avoid losing things we consider vital to our happiness, health, and comfort (like shelter, water, heat, electricity, etc.)
A trick that I use to help me save is to include savings in my budget as an EXPENSE. I treat it like a necessity. Just like all my other major bills. I also set up my savings to be automatically deducted and transferred into my savings account, so I don’t have a chance to spend it on something else (like all the music, movies and other things on my huge Amazon Wish List).
When you add your savings amount goal into your budget, make sure you add it in as a SEPARATE additional item in your budget. That is what I do. This method has helped me save thousands for my retirement and emergency fund at the SAME time.
Initially, you’ll feel the drop in your available spending cash. So just adjust other areas of your budget to account for this. In no time at all, you will get used to working with this new cash flow and will create new spending habits.
Begin treating your savings like a NECESSITY. When you start doing thing, saving will become a habit, and you won’t even think about it anymore. It will become as automatic as the deductions you’ve set up to fund your savings account (make sure you don’t forget this step!).
Then you can watch your savings grow. And grow. And grow. There’s just no feeling like it. That feeling of increased security and accomplishment, as you see yourself steadily moving closer and closer to your dreams…
About Yolanda Ransom
Yolanda Ransom is a financial educator, speaker, coach and workshop trainer who teaches people how to confidently master their money so that they can achieve all of their financial dreams. She is the CEO of Yolanda Ransom Consulting and speaks on topics of personal finance, personal development and Black issues. You can book her to speak at your next event about this topic or her other speaking topics by visiting Yolanda Ransom Speaking