Developing a savings habit is an important part of achieving financial security.
One of the things that I have heard from people I know struggling with their finances is this: “I don’t have enough money to start saving.”
Unfortunately, that kind of attitude is a big part of why, for many, saving isn’t a priority. There is this idea that you have to be able to set aside a large amount of money each month in order to be effective. This isn’t true. One of the best things you can do for your finances is begin developing the habit of saving.
Start by Saving Small Amounts of Money
It’s fine to start small with your savings efforts. Over time, your small efforts can add up. If your partner is reluctant, try to convince him or her that you can start with a small amount at first. Look for small amounts to add to your savings effort. This can include putting your change in a large jar, or looking for small expenses to cut from your budget so you have money to set aside.
Over time, small amounts can add up. While I’m not a huge fan of the Latte Factor mentality, I know that it works for some people. And it can work even better if you decide to invest the money, rather than just put it in a high yield savings account. (My buddy Todd at Financial Mentor has a Latte Factor Calculator that can help you figure out how to turn small amounts of money into better savings.
More important than the small amounts you are setting aside, though, is the fact that you are developing a good financial habit that can stand you in good stead later. Develop a savings habit, and you will stick to it later, and you will eventually start looking for other ways to save money.
Increase the Amount that You Save
Even if you can only start with $5 or $10 a week, saving is a good habit to get into. However, you won’t be able to build up a solid nest egg or emergency fund with that small amount. In order to achieve financial security, you will need to start looking for ways to increase the amount of money you save on a regular basis.
You can step up your savings goal in increments as well. Look for ways to add more to your savings over time. And don’t just think about cutting your spending. It’s also a good idea to look for ways to earn money. You can get a part-time job, or start a home business on the side. Don’t just assume that the money for your savings goals has to come from penny pinching. Look for ways to earn more money — and put a portion of that money toward savings.
Don’t just stop with your small amounts of saving. Start saving what you can now, and then step up your efforts over time. This is a good habit to be in, and, over time, your efforts will add up.
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