Even for the most disciplined and budget-conscious individual trying to achieve a savings goal is easier said than done. The journey to reaching that end goal is filled with spending temptations that are challenging and the human desire for instant gratification is difficult to ignore. Whether your aspiration is an exotic beach vacation or the down payment on a new home, reaching any end-goal savings amount involves more than just setting a monetary value and establishing a timeline. This type of savings endeavor requires an in-depth look at your daily spending habits. These trivial expenditures may seem benign, but add up over time. If you need some extra reinforcement to help wrangle-in your spending habits…keep reading to pick-up some simple tips and tricks.
Change Your Routine
Convenience and habit are two of the biggest contributors to mindless spending and both can jeopardize reaching your savings goals. Who doesn’t love the speed of the corner coffee shop in the morning or that delicious deli sandwich at lunch? It’s easy to fall into a daily spending routine when it saves you time and provides what you desire with ease. However, this all comes with a price tag attached.
To counteract this habit, take time to consider where your money is going and replace those old, expensive habits with some less expensive ways to get the fixes you crave. No need to deprive yourself of your favorite treats, just replace that old routine with a new one that better serves your savings agenda. This might mean a weekly trip to the grocery and making time to prep food for lunch, or having your favorite coffee on-hand and ready for your home coffee maker. Alter your routine, and mindless spending can be curbed in the process.
Know Your Spending Triggers
Even if you head to the store with good intentions and a list, it’s easy to walk out with a dozen other impulse purchases in your cart. Online shopping and specialty stores are another pitfall…easy to get over-zealous and get caught up in the moment. Overspending is sometimes influenced by mood or emotions. Bad day at work or just feeling blue? Feeling lonely and nothing to do…mall sound like a good idea? For some, spending money can serve as a temporary salve to soothe the pain. However, when you see that bill, the pain starts all over again. Even going to the grocery store feeling hungry can affect spending habits. Know your spending triggers. Try keeping a spending diary to help pinpoint those triggers. Being aware of your spending triggers can help you to anticipate better and more affordable ways to overcome them.
Beware of Budget Vampires
Your fixed expenses — things like rent and car payments — probably consume the bulk of your budget. However, many of us also carry variable expenses which can add-up to become a considerable drain on our resources. You’ll probably recognize the three most common ones…
- Subscription Services – Monthly sample boxes and cable add-ons are just a couple of the many subscription options available today. It’s feasible to say that hundreds of dollars a month can disappear from your account in small, easy-to-miss increments if you’re not paying attention. Pare down the list of services by determining the ones you can’t live without. Once you decide which services you absolutely need, comparison-shop and see if switching providers could save you money.
- Fees – If you frequent out-of-network ATMs, you could shell out more than $4 per transaction. Add to that any checking and/or overdraft fees, and you could be throwing away more than you realize. Carefully review the services your financial institution provides and what types of fees are charged or covered. Think you can do better? Look around for a lower or no-fee option.
- Energy Usage – It goes without saying that we could all try harder to save energy. Some simple tricks to incorporate in your home include using a power strip with all electronics to stop phantom power when they aren’t being used, using a digital thermostat to better control heat and air conditioning usage, and to adjust your water heater setting to 120 degrees or below to save the energy necessary to heat the tank.
If saving doesn’t come naturally to you, there are several non-traditional tools you can tap to assist on your savings mission. Apps are a great way to make the process more automatic with less work on your end. Checking your bank account via a phone app may be the extra incentive you need to stop that impulse purchase.
- Digit – Digit can monitor your spending habits and make small, weekly transfers into your savings account when it won’t impact your checking account in a noticeable way.
- Acorns – Acorns rounds up your purchases to the next dollar and then takes that spare change and invests it for you in a diversified portfolio of stocks and bonds.
- Simple – Simple is a bank and a spending app. With your input and the debit card it comes with, the system can keep track of what is “safe to spend” after taking your bills and savings goals into consideration.
By becoming aware of your spending habits, along with the physical and emotional triggers that spawn them, you can navigate the path to a successful savings goal. Embracing minor adjustments to your spending habits today will enable you to have the spending power you need when that future opportunity presents itself.
Tom Reese has 20+ years experience in helping his clients sell their homes for a price that sells and makes them a profit. Tom has helped his clients buy and sell property in every neighborhood in Northern Kentucky and Cincinnati.
About Tom Reese
Helping my clients attain their dreams has been the foundation of my success. With my strong attention to customer service, I have earned my clients continued support and referrals. Put my enthusiasm and dedication to work for you!
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