For many people, saving money is a great challenge. However, others might be quick to spend whatever money comes their way without a second thought. With that, you could easily get off track in your saving process as soon as the unexpected happens. Don’t worry! You are not alone.
How do you start saving money? Have you heard about the 30-day saving challenge? It is simply a process of saving that involves setting aside a certain portion of your income for 30 days. The implication of this is that there is no room for making impulse purchases – that is, making purchases based on emotions rather than sticking to a budget. You simply set a goal, get committed to the goal for 30 days, and then make the purchase.
The following steps are critical in helping you achieve the goal of money-saving for 30 days.
Step 1: Make a budget
Creating a budget is the first step towards controlling your income and expenses as well as creating a space for savings. You will not have an idea of the amount that could be put into your savings account when you don’t know how much you spend. By creating your budget, you are able to track your spending.
Not only that but you are also able to know what extra money could be added to your savings account. It is recommended that you automate the process. There are spreadsheet apps that allow you to monitor your finances on a daily, weekly, and monthly basis.
Ideally, your monthly spending should be less than your income while still offering you an opportunity to save at the very least 10% of your income. If unrealistic for you, consider saving less. This, however, depends on your monthly income and financial goals.
Step 2: Set a realistic goal
With the 30-day saving challenge, you are setting a short-term goal. Decide your saving goal. For instance, this may be $500. Beyond having a target amount, it is important that you create a purpose for the money. In the absence of a purpose, you tend to get distracted, thus lacking the motivation you require to keep going.
Are you planning to go on a short vacation or a family trip? Do you want to get a new car? What about rewarding yourself with a special treat at a nearby restaurant? Irrespective of the goal, there should be a clarity of purpose. A detailed plan for a family trip, for instance, would look like this:
- $150 for travel expenses
- $300 for lodging
- $150 for food
Remember, your initial goal doesn’t have to be so big that it becomes unrealistic – you may not be able to gain enough motivation to meet your target. Rather, start small. However, be sure that you are consistent and control your money spending habits.
Step 3: Cut down on expenses
With the expenses you incur on a daily basis, you may be inhibited from having enough savings that could help you meet your financial goal. By carefully observing your spending life, you might have developed certain bad spending habits. Identify and get rid of the habits.
Can you do without the coffee you often grab every morning as you drive to work? What about the trips you take to the movies every Friday night? How much does dinner-out with friends take away from your income? What if you decide to forgo any of or all these expenses for a period of 30 days, how much will you save to add up to your savings account?
Notwithstanding, enjoying all these will not amount to careless spending. You may only have to enjoy them less to be able to save more.
Apart from this, you can also consider trimming down high bills. Think of it, do you utilize all subscriptions you make for phone, internet, and cable? Is it possible to negotiate with your service providers for lower rates and discounts? Of course, you wouldn’t know until you make attempts to reach out to them. Remember, there is no harm in trying.
Make a list of the bills you pay every month (as stated in your budget), and cancel unnecessary ones or the ones you could no longer sustain. You may be surprised that you can cope without checking in to your Netflix, for instance, for a month.
Step 4: Start saving
With knowledge of the financial goal, you have an idea of how much to throw into your savings account each day. For instance, a financial goal of $500 for a 30-day period would amount to saving an average of $17 each day. Remember this is a challenge. The implication is that it is not going to be easy.
One great mistake you may make is to save it into your checking account. You may be tempted to spend it. Rather, invest your money in a high-yield savings account. Through this means, you would be making your money work for you.
Step 5: Earn more to save more
Check your home for items that are lying around – clothing, old bicycles, books, toys, unused appliances, etc. Your kids might have outgrown some clothing items or gifts. You might have received certain gifts that you never used. You don’t have to keep all these. Otherwise, your house becomes cluttered or the items have their values depreciated over time.
Take stock of the items that could be sold and you might be surprised how much you actually make. This gives you additional cash money. You may want to check out Craigslist or Facebook marketplace to sell your kid stuff. To sell clothes, use ThredUp. It is an online consignment shop.
Step 6: Have an accountability partner
In achieving life goals, there is the need to be accountable for your actions and steps. Otherwise, you may lose motivation along the way. Before going ahead with your saving goal, meet with your accountability partner to share your goal with them.
Such an accountability partner may be a family member, co-worker, spouse, or even a friend. Usually, they should be people who are committed to helping you accomplish your goal. To sustain their interest, you may also offer to incentivize them.
For instance, if your accountability partner is your wife. You may promise her a night out at her favorite restaurant if she helps you reach your goal within the specified time.
Saving remains a great challenge that could be overcome. It is possible that you will fail. For instance, you may still go ahead to make impulse purchases despite your decision to avoid them completely. If this happens, don’t have to be hard on yourself. Failure comes with greater lessons than success. With past failures, identify the problem and try as much as possible to avoid it in the future. Setting goals and achieving them requires great discipline, commitment, and time. The steps provided here will not only help you achieve your short-term goals but will also establish great financial foundational knowledge to prepare you for a better and more secure future.