5 Ways to Make Saving Money a Lifestyle

You know what the problem is: you do not save enough money, and now that the economy is down, you are suffering, too.  Saving used to seem easier than it is since priorities have changed.

You cannot be without a good savings plan because if you are ever going to have enough money for the bigger purchases, you have to begin to pay cash for as much of them as you can.  That means tapping into reserves and then building them back up again. Here are five ways to make savings a lifestyle.

Set goals.  Look at where your money is coming from and to where it is going.  If your income is a salary, then you know exactly how much you are going to get every week or other week.  If it is hourly, then it becomes a little harder because of the up and down nature of hours that are worked and income from overtime.  Use a spreadsheet or piece of paper to monitor your expenses and income every month.  In this way, you can set goals after you see what you can expect.

Be specific on dollar amounts.  Decide what amounts you need to make your savings plan work for you. In other words, set an amount to set aside as a cash reserve for emergencies and an amount as an income replacement.  Get this cash reserve fund going as soon as you can so that you will have it available to use right away.  Work on your income replacement fund by determining how many months you need for your situation and then begin to set that money aside as well.  Then, do not forget your retirement savings plan and the need to fund it also.

Distinct accounts.  Separate these funds by putting the money into distinct accounts.  Do not intermingle the money.  The cash reserve can go into a debit card account that is separate from your primary checking account.  That way you can get to the money either by using your debit card or going to an ATM to retrieve it.  The income replacement fund should be in a high yielding savings account, or even a Certificate of Deposit.  Your retirement savings should go into a qualified, tax-sheltered account like a company-based 401k, or an IRA account of your own.

Auto-pilot your savings.  Your retirement savings should be automatically deposited through your employer.  Use this same philosophy for your income replacement fund if possible.  Have it go into your account automatically from your paycheck so that you do not see or miss the money every week.

Make savings an everyday occurrence.  Here is where the change in lifestyle will help you.  Look for ways to save everyday on items that you use all of the time.  It is the little things like spending less on eating out, or using coupons when you grocery shop.  Refuse to pay full price on larger priced items until you have performed price-comparisons from at least three sources.

All of the little things add up and can become your savings lifestyle.  Do not get discouraged if you have a time that you do not adhere to your plan – either because of your actions, the actions of someone in your family or circumstances beyond your control.  Get back up and continue on and you will still reap the rewards of living a savings lifestyle.