Want to stash more cash? Here are 7 good habits to save money
Without good habits to save money, it’s impossible to develop a cash safety net for emergencies or to save for that holiday you’ve been dreaming of. It turns out that people who are great at saving money all practice the following seven habits – including setting a savings goal.
According to a survey from Finder, 44% of Australians could only survive off their savings for one month or less.
Considering that millions of Australians have little-to-no cash reserves to fall back on, if you have any money at all in the bank, you’re off to a good start. Part of the saving challenge for Australians is that we have one of the highest costs of living in the world. Housing, an essential living expense, is especially expensive. This has the effect of making saving money more difficult than it should be.
But by developing good habits to save money, the good news is that it can become second nature. It’s all about developing better money habits and following the lead of Australia’s best savers!
These are the 7 good money habits of great savers
1. Set a savings goal
Good habits to save money start with goal setting. Savers have specific goals for their money and these goals positively influence their daily money habits and choices.
When they feel tempted to spend beyond their budget, their saving goals are a reminder of the future gratification awaiting them, which makes it easier to stay focused and resist temptation. This makes it easier to stay focused and resist temptation.
They also know that having a mix of small goals (eg. saving for a concert ticket) and big goals (eg. saving for a house) is a good way to stay motivated.
Not sure how to set a savings goal? Start with this savings calculator.
2. Good money habits start with a good budget
Good money habits require you to understand that the way to supercharge your financial fitness is to combine the benefits of setting a savings goal (focusing on a clear, specific destination) with the benefits of budgeting (creating a detailed plan).
This means having budgeted living expenses set aside, as well as a savings plan. Savers have no problem saying “I can’t afford it” if an expense goes outside of their budget.
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And they don’t expect instant gratification. They may even set themselves spending rules, such as to wait 30 days before making any significant purchases. Try this personal budget template.
3. Keep your savings separate
One of the best money saving habits is to never let your savings touch your pocket or get muddled up with your spending money.
Create a dedicated savings account. People with good money habits keep their cash reserves separate from the money they use for living expenses and bills. And the harder it is to access the account, the better.
Great savers also recognise that their savings may start out small, but over time they’ll grow a cash safety net for emergencies or go towards special projects or events, such as date nights, holidays or a home deposit.
4. Automate your savings
Regarding good habits to save money, you can turn saving into an automatic habit by letting your bank or employer do the work for you.
Once you’ve got a dedicated savings account, the next step is to set up an automatic transfer so that a part of every pay is deposited directly into it. The payroll administrator at your work can set up the disbursement for you or you can schedule an auto-transfer between your accounts.
5. It’s the little things that make a big difference
When it comes to good habits to save money, it’s a common misconception that you need a high income to be able to save. In reality, your ability to save is far more affected by how much you spend than how much you earn.
If you’re finding it hard to save on a regular basis, it pays to look at your money-saving habits and identify areas to make changes.
Great savers know, for example, that making their lunch at home instead of buying it every day could save them around $4000 a year — money they’d rather put towards a holiday or other savings goal!
6. You value financial security
Good habits to save money prevent financial stress. Living week-to-week without savings to fall back on can make you vulnerable to financial stress.
When unexpected bills come up, which they invariably do, people without savings are more reliant on credit cards or loans to make ends, whereas savings are a foundation for financial independence and economic security.
7. Good money habits mean good life choices
If you’re good at saving, you appreciate that saving may not be an exciting conversation topic, but achieving your financial goals is!
It’s not about the money, it’s about the options that a cash safety net represents and managing your money to achieve the type of life you want to live.
Money may not buy happiness, but it provides more choices, which translate into the power to dream bigger dreams.
Good habits to save money start at MyBudget
Money saving habits are the key to your success. If you’re not sure where to start, book your free personal budgeting appointment by calling us at 1300 300 922 or enquire online.
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