Everyone wants to save money, but it often gets put on the back burner. When it comes to saving money, it may seem easier said than done, but it doesn’t have to be that way. Taking a close look at what you want to save for and creating a plan for how to get there can help set you up to have financial success for years to come.
Set your goal
The first step to saving money is to set a goal. When starting out, it may be hard to save money habitually, and having a goal in mind can help you take actionable steps to reach it. Sit down and decide what exactly you are saving for, and the amount needed. Your goal may be short term (a weekend away), long term (retirement), or somewhere in the middle (a down payment for your dream home). This may even be as simple as starting an emergency fund. In a recent study done by the Federal Reserve, it was found that nearly 47% of adults could not cover an emergency expense of $400 with cash. If you are just getting started on your savings journey, setting a smaller goal can help you realize that saving isn’t as hard as you thought it to be, and can motivate you to continue saving. Setting a realistic and attainable goal to start off on, even if it is just a few hundred dollars for an emergency, will help you make changes in your life to begin saving, and ultimately help you years down the line.
Make a plan
Once your goal is set, sit down and decide what it will take for you to get there. With this step, it is important to be realistic about what you can afford. Pull up your budget, and take a deep look at your current spending habits. It may be tempting to decide to cut out something entirely in order to reach your goal as fast as possible. Instead, try to see where you can cut your spending and increase your savings. Then, you can determine what realistic time frame you will reach your goal by.
Setting some check points along your way will help keep you on track to reach your goal on time. With eBranch, you can “hide” your savings account from showing each time you log in, which can alleviate the temptation to spend it. However, it’s important to not forget about it completely. Make a schedule determining when you will check to see how you are doing, setting smaller goals to mark your progress along the way. You may have to adjust your plan or expectations at times, but remember, slow and steady wins the race!
One of the easiest ways to build new habits is to implement it with a current, existing habit that you already have. You may have sat down and realized that you have an extra $15 a week to save if you just gave up your morning coffee every day, and felt excited about that possibility. However, when you cut out a habit completely and replace it with a new habit, you are much more likely to revert back to the habit you were trying to cut out. Changing your spending habits entirely is not an easy feat, and you may need to start a little smaller in order to avoid discouragement. Even though you may not reach your goal as quick as you’d hope, but setting aside a just a few dollars a week will add up over time. So, instead of cutting out your morning coffee entirely, consider making it a habit to transfer a little bit into savings every time you get your coffee! This takes your current habit, and adds on a new action. While you are waiting on your order, you can log into eBranch and transfer into your savings account.
Make it Automatic
Making your savings automatic takes all of the thought and effort off of your shoulders. Many people like to set up their accounts so that each time they get paid, a set amount of money automatically goes into their savings account without them ever having to lift a finger. While this is a great option, it may not always suit every person’s circumstances. Instead of deciding to throw out this suggestion, taking a different approach to it can help you still save automatically without having a set amount go into savings each week.
Let us do it for you
At Idaho Central, our solution is our Central Cents savings account. This account is the perfect balance between habit stacking and automatic savings. Each time you run your debit card, this account automatically rounds up your purchase to the next dollar and automatically deposits the extra into your savings account. For example, if you spent $2.10 on your morning coffee, this account rounds that amount up to $3, and deposits the extra $0.90 into savings for you. If this is a regular purchase, it adds up quickly! If you ran this transaction 5 days a week, you would have $18 by the end of the month, and $126 by the end of the year! Include all of your other daily purchases, and you’ll be well on your way to reaching your savings goal. Not only can you maintain your current spending habits, but you’ll increase your savings each time you spend. The impact is minimal in the moment, but adds up quickly with each purchase you make. You can have your coffee, and save automatically too!
Starting on your path to financial success by making and keeping savings goals is an exciting process! Luckily, it has never been easier to open a Central Cents account with our new online application. If you have any questions or would like to explore our savings account options, please reach out to us and we will be happy to help!